TMI Blog1964 (3) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... latram Rawatmul, is a firm registered under the Indian Income-tax Act, 1922. At all material times there were six partners of the firm. They were Nandlal Bhowalka, Giridharilal Bhowalka, Shyamlal Bhowalka, Bajranlal Bhowalka, Rawatmul Nopany and Rameshwarlal Nopany. The firm carried on business as dealers and commission agents in jute, rice and other commodities. For the account year 2001-2002 Bikram Samvat (September 27, 1944, to October 15, 1945) the firm was assessed in the assessment year 1946-47 by the Income-tax Officer, Non-Companies-cum-E.P.T. Circle, under section 23(3) of the Indian Income- tax Act. On February 19, 1955, the Income-tax Officer, Central Circle VI, to whom the case was transferred by the Central Board of Revenue, issued a notice under section 34 of the Act calling upon the firm to file a revised return of income for the corresponding accounting year. Pursuant to this notice the firm filed are turn showing an income of Rs.2,75,168 according to its original assessment as reduced in appeal. The Income-tax Officer thereafter inspected the books of account of the assessee and found that on November 2, 1944, an amount of Rs. 5,00,000 was tendered in cash to the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Sheo Prasad Agarwalla, son of Rameshwarlal Nopany ---a partner of the assessee. This deposit was later offered as security for overdraft facility granted to Sri Hanuman Sugar Mills Ltd. in the managing agency of which the partners of the assessee had a controlling interest. In the view of the Income-tax Officer the amounts of the fixed deposit receipts credited in the Jamnagar branch of the Central Bank of India names of the three sons of the partners of the assessee were " secretin the ed profits " belonging to the assessee and on that view he added the sum of Rs. 15,00,000 to its total assessable income and completed the reassessment. In appeal by the assessee the Appellate Assistant Commissioner of Income-tax held that the assessee was able to explain the source of Rs. 50,000 only, out of the fixed deposit of Rs. 5,00,000 in the account of B. N. Gupta, but not in respect of the other deposits. Accordingly the Appellate Assistant Commissioner modified the order of the Income-tax Officer and added an amount of Rs. 14,50,000 out of the amount of Rs. 15,60,006 representing the three fixed deposit receipts in the names of the three sons of the three partners of the assessee as " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserving that the question suggested by the Commissioner whether the Tribunal was justified in drawing an inference that " the fixed deposit of Rs. 5 lakhs in the name of Sheo Prasad Agarwalla did not represent the concealed income of the assessee firm was a question of fact not referable under section 66(1) of the Indian Income-tax Act ". The Commissioner of Income-tax then applied to the High Court of Calcutta for an order calling upon the Tribunal to state a case and refer it to the High Court. The High Court rejected the application. With special leave, the Commissioner of Income-tax has appealed to thiscourt. On behalf of the Commissioner, Mr. Rajagopala Sastri has contended that the decision of the Tribunal involves a question of law in that that no person acting judicially and properly instructed as to the relevant law could have arrived at that decision. Principles which govern references under section 66 of the Indian Income-tax Act are well settled. In Sree Meenakshi Mills Ltd. v. Commissioner of Income-tax this court held that findings on questions of pure fact arrived at by the Tribunal are not to be disturbed by the High Court on a reference unless it appears that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd.---managing agents of the Sugar Mills Ltd. and the entire amount so advanced had ultimately found its way into the account of the Sugar Mills. Out of the six partners of the assessee three were directors of Sri Hanuman Sugar Mills Ltd. and the Sugar Mills Ltd. was under, the control of the assessee firm. These facts Mr. Sastri contends are capable of only one inference, viz., that the deposit in the name of Sheo Prasad Agarwalla was of the assessee and represented its " secreted profits " and any conclusion contrary thereto must be regarded as perverse. We are unable to agree with that contention. The High Court exercises an advisory jurisdiction under section 66 of the Indian Income-tax Act. Only a question which arises out of the order passed by the Appellate Tribunal can be referred by that authority under section 66(1) of the Indian Income-tax Act and if the Tribunal declines to state a case, the High Court if it is not satisfied of the correctness of the decision of the Tribunal may require the Appellate Tribunal to state a case and to refer it. But the High Court has no power to call upon the Tribunal to state a case, if there is some evidence to support the finding ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
