COMMISSIONER OF INCOME TAX Vs. J N SARMA

JUDGEMENT

(1.) IT was in compliance with the direction of this Court under S. 256(2) of the INCOME TAX ACT, 1961, as made in Civil Rule No. 25(M) of 1993, that the following questions based on statements of facts were drawn by the Department :

(2.) LEARNED counsel appearing for the assessee, at the very outset submitted that notwithstanding the fact that this statement of case has been sought by the High Court and the above question referred for its opinion, the Court is not bound to answer the question. Before we deal with this contention, it would be pertinent to note the basic facts. The assessee had three tea gardens. In the asst. year 1985 -86, the AO held that the expenditure incurred on en bloc replantation was capital expenditure in nature. On appeal being preferred by the assessee, the CIT(A) held that replantation expenditure was revenue expenditure and as such allowed the expenditure incurred on replantation. On further appeal by the Revenue, the Tribunal held that the assessee's claim was correctly allowed by the CIT(A) on the facts of the case. It was pointed out that the AO had not recorded a finding to the effect that the replanting was done on virgin area of the tea garden and in the absence of necessary finding of facts the contention advanced by the Revenue was accepted. It was in pursuance to this Court's direction that the statement of case has been submitted.

(3.) IT is a cardinal rule that the High Court in reference proceedings does not and cannot go behind the facts found. It cannot look at the evidence that was not before the Tribunal when it reached the impugned findings. The jurisdiction of this Court in a reference under the taxation statute is purely advisory. The posed question of law whether it really arises out of the finding given by the Tribunal ?