TMI Blog1960 (10) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... flation of wages, which is essentially a question of fact, into a question of law. The High Court was, therefore, right in its answer to the first question. The Tribunal accepted some of the explanations as good explanations ; yet the Tribunal found that the defects in the keeping of acquittance rolls or the wages record indicated an inflation of wages and held that the Income-tax Officer was right in adding back ₹ 50,000 in respect thereof. This finding of the Tribunal can have only one meaning, namely, that there was an inflation of wages. Therefore, we are of opinion that it is idle on the part of the assessee-company to contend that no opportunity was given to it to explain the defects in the acquittance rolls.. Appeal dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd salaries in the year of account. The assessee-company gave a reply to the effect that the increase was due to dearness allowance and bonus paid to the workmen under certain orders of the Ministry of Labour, Government of India, as per its resolution dated October 10, 1947. The Income-tax Officer was not satisfied with the explanation and called upon the assessee-company to file a comparative statement showing department wise salaries paid each year beginning from 1939. This comparative statement was not furnished by the assessee-company. It filed, however, a statement showing the increased rates of salaries. The acquittance rolls were then called for and examined. So far as the workmen on weekly wages were concerned, the assessee-company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances as per the Government resolution dated October 10, 1947, then the increase in the wages in the relevant year could not be considered to be an exceptional increase. The Tribunal then concluded by saying : " For such defects as were noticed in the keeping of acquittance rolls and wages record, we are of the opinion that the original addition of Rs. 50,000, made by the Income-tax Officer for inflation in wages was quite sufficient. There was no justification in making a further addition of Rs. 2 1/2 lakhs. " The assessee-company then moved the Tribunal under section 66(1) of the Indian Income-tax Act, 1922, and section 19 of the Business Profits Tax Act, 1947, for a reference of certain questions of law arising out of the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel for the appellant has contended that the High Court was in error in answering the questions against the assessee and he has urged two main grounds in support of the appeal. His first ground is that there were no materials from which any inference could be drawn that the expenses under the head " wages and salaries " had been inflated by the assessee-company, in the relevant year of account. He has pointed out that the Tribunal in its order dated April 20, 1951, had accepted the explanations which the assessee-company had given with regard to the increase in the wages bill, and after having accepted these explanations the Tribunal expressed the opinion that the origin al addition of Rs. 50,000 made by the Income-tax Officer was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kerosene oil etc., which was previously borne by the workers but was to be borne by the assessee-company in the relevant year. He has further drawn our attention to the circumstance that the Income-tax Officer proceeded on the basis of coal despatched and not on coal raised during the six years for which the Income-tax Officer prepared a comparative statement. It has been pointed out to us that on a correct computation based on the tons of coal raised the increase came to Rs. 715 per 100 tons of coal raised for the year 1948 as against Rs. 526 for the year 1947. It is argued that the increase is less than what the Government itself allowed for the price increase. All these points have been fully considered by the High Court ; yet the High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was for the income-tax authorities to consider the correctness or otherwise of these explanations. If the income-tax authorities chose not to accept these explanations as correct, that does not mean that the finding as to inflation of wages at which they arrived was a finding based on no material. The materials were there ; what happened was that the income-tax authorities did not accept as correct the explanations offered by the assessee-company. We do not think that the non-acceptance of the explanations given by the assessee-company converts the question of the inflation of wages, which is essentially a question of fact, into a question of law. The High Court was, therefore, right in its answer to the first question. As to the second ..... X X X X Extracts X X X X X X X X Extracts X X X X
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