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TMI Blog1960 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 22, 1957, dismissing summarily an application under section 66(2) of the Income-tax Act for a direction to the Appellate Tribunal to state a case. These appeals have been filed with special leave restricted to " the question relating to the transactions in sovereigns only ". In the course of the assessment proceedings before the income-tax authorities, diverse contentions were raised, but in view of the restricted leave, we will refer only to the " transactions in sovereigns from the Bombay branch " of the appellant and to no others. The appellant is a dealer in gold and silver and other commodities and has his head office at Calcutta. In the year of account Samvat year 2002 and 2003 (November 4, 1945, to October 23, 1946) correspondin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere made but he expressed his inability to do so. It is however observed that mostly sales have been made to Karachi office and the margin of profit is likely to be much less." The Income-tax Officer estimated the profits on the total sales of sovereigns at the rate of 0.5% at Rs. 56,901 and after deducting therefrom Rs. 6,492 returned by the appellant as his profit, he added on the sovereign account Rs. 50,409 as income in the transactions in sovereigns in the Bombay branch. In an appeal against, the order passed by the Income-tax Officer, the Appellate Assistant Commissioner, Calcutta, confirmed that order observing : " It is stated by the appellant's representative that the Income-tax Officer wrongly rejected the profit in this accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Tribunal rejected the contention raised by the appellant observing in paragraph 8 of the judgment that " for the reasons given by the Appellate Assistant Commissioner with regard to the sovereign account in the Bombay branch, we find no reasons to interfere in his decision." The appellant then applied to the Tribunal to refer certain questions arising out of the order to the High Court at Calcutta. Question No. 2 suggested by the appellant as arising out of the order of the Tribunal was as follows : " Whether in the facts and circumstances of the case the Tribunal should not have held that the turnover both in Calcutta and branches on which the flat rate is to be applied should be arrived at after deducting therefrom the sum of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal. The Income-tax Officer observed, as stated hereinbefore, that in the year of account, the appellant had sold 1,66,188 pieces of sovereigns to his Karachi branch and 14,309 pieces in the local market in Bombay, and he estimated the gross profit at the rate of 0.5% on an assumed total sale of Rs. 1,13,80,331. The appellant contended that he was the owner of the Bombay branch as well as of Karachi branch and that he had despatched the sovereigns from Bombay to Karachi for sale and that such a despatch did not amount to sale of sovereigns to the Karachi branch. The charge of 2 annas as commission per Rs. 100 for which a separate account was maintained by the appellant was, it was contended, not profit and that it was not included ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and not on the despatches to Karachi. The Tribunal merely accepted the conclusion of the Appellate Assistant Commissioner ; it gave no independent reasons in support of its order. The income-tax authorities did not find that on a comparison of the rates at which the sovereigns are debited in the Bombay branch and the rates at which they were credited in the Karachi branch, any profit was earned by the Bombay branch. The commission account is not incorporated in the printed paper book, but it is not even suggested that the commission was in the nature of profit and not service charges as submitted by counsel for the appellant. In our view, a question of law arises from the judgment of the Tribunal which confirmed the order of the Appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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