COMMISSIONER OF INCOME-TAX Vs. RADHAKISHAN RAMNARAIN

JUDGEMENT

(1.) THE Commissioner of Income-tax has stated this case according to the order of Kinkhede, A.J.C. passed in Misc. Judl. Case No. 8-B of 1927 on 25th June 1928. The facts have been stated at some length in the reference and need only be briefly repeated. There is a firm at Akola styled "Raghunathdas Rampratap" of which the owner is Radhakisan Laxminarayan. That firm keeps accounts from Diwali to Diwali and submits returns accordingly for the purpose of income-tax. For the year ending in Diwali 1924 the return shown was: Rs. as. ps. Income ... ... 10,473 12 6 Loss ... ... 5,034 13 9 _______________ Total income ... 5,438 14 9 _______________

(2.) THE income-tax officer not accepting this return called for accounts and submitted a report to the Assistant Commissioner who, after hearing Radhakisan and examining the accounts, assessed the income at Rs. 44,847-6-0. Radhakisan made an appeal to the Commissioner of Income-tax and some reduction was made by the Commissioner; but otherwise the assessment was upheld. The assessee then applied for a reference Under Section 66 (2), Income-tax Act to the High Court, but his prayer was rejected by the Commissioner on the ground that no question of law arose out of the facts of the case. On an application then being made to this Court, Kinkhede, A.J.C. held that the case involved questions of law and directed the Commissioner of Income-tax to state the case and make a reference.

(3.) IN his order of reference the Commissioner has pointed out that the grounds given in the application to the High Court Under Section 66(3) of the Act were distinct from the grounds given in the application to the Commissioner Under Section 66(2), and contends that no reference upon a question of law not raised by the applicant before the Commissioner can be obtained, referring in this connexion to the case decided by this Court in Commissioner of Income-tax, Nagpur v. Jainarayan Motiram of Shegaon M.J.C. No. 20-B of 1927, decided on 30th June 1928. and to the case decided by the Madras High Court In the matter of the Income-tax assessment of P. Thiruvengada Mudaliar A.I.R. 1928 Mad. 889, decided on 14th December 1927, and also to the decision of the Allahabad High Court In the matter of Lall Mal Hardeodas Cotton Spinning Mills p. 266 of the Income-tax cases, Vol. I and In the matter of Makham Lal Ram Sarup (p. 416 of Vol. I of the same reports). The question whether an assessee can obtain an order of reference from the High Court upon a point of law not raised in his application to the Commissioner Under Section 66(2) of the Act need not, we think, be gone into in disposing, of the present reference, because, although the grounds given in the application to the High Court were different in form from the grounds given in the former application to the Commissioner, the real point at issue is the same, viz., whether the Assistant Commissioner was right in disallowing the losses amounting to Rs. 24,528-1-9 alleged by the applicant during the year under assessment. The question of the interpretation of the Assistant Commissioner's order does not, in our opinion arise, because the Assistant Commissioner's order is really clear and, in any case, the order of the Commissioner when deciding the appeal is as clear as possible and can leave no room for doubt that the losses were not allowed because they were held to be not proved, and not on account of any imaginary profits or gains which were supposed to have occurred during the year under assessment or the previous year.