GRAIN CHAMBER LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under section 66(1) of the Income-tax Act. The question which has been referred to us for opinion is as follows :

(2.) THE reference relates to three assessment years 1952-53, 1953-54 and 1954-55. THE facts giving rise to the reference are these. THE assessee is a company. THE business of the company was to act as a clearing house for forward and speculative transactions in gur carried on by its members. THE company acted as principal to principal in transactions with its own members and when acting as clearing house for profits and losses incurred the assessee also used to charge certain fees from its members. As there were heavy fluctuations in the prices of gur, the Government, by a notification dated February 15, 1950, banned speculative transactions in gur. After the ban was imposed the members of the company decided that the pending contracts should be squared up at the closing rates of February 14, 1950. This gave rise to several civil suits by the members in defending which the company had to incur certain expenses. One of the members, namely, Mohan Lal & Co., applied for the widing up of the company and for the appointment of a liquidator. Ultimately the widing up application was dismissed by this court. This court held the civil court should give a finding whether Mohanlal was a creditor. In this proceeding also the company had to incur litigation expenses. Certain other suits were filed against the company by some of its constituents. It incurred expenses in defending these suits also.

(3.) THIS means that the question which has been referred to us was not the question raised before and decided by the Tribunal. In this view it is not strictly necessary for us to answer the question which has been referred to us and it would be proper to return the reference unanswered on the ground that the question of law referred of us does not arise out of the appellate order of the Tribunal.