(a) Income-tax---

----Reference---Application for reference---Limitation---Members of Tribunal concurring on some points and differing on some points---Application for reference on points held against revenue by both members---Third member giving opinion on points of difference---Consequential order by Tribunal---Fresh application after decision by Tribunal---Revised application for reference consolidating the reference applications on direction of Tribunal ---Not-barred by limitation---Indian Income Tax Act, 1961, S.256.

Held, (i) that with regard to the assessment year 1974-75 numerous points were in issue regarding the assessment of the assessee. The matter was heard in the first instance by the two members constituting the Tribunal. They concurred on some points and differed on certain others. Some of the points had been held against the Revenue by both the members and, therefore, the Revenue filed two reference applications. These reference applications were pending when the matter was heard on the points in difference by a third member to whom they were referred. He passed an order on January 29, 1991, giving his opinion on the points of difference. A consequential order incorporating his finding was passed on February 28, 1991. Thereupon and in view of certain findings against it, the Revenue field another application. The Tribunal directed the Revenue to file a consolidated statement styled as revised reference applications incorporating the questions which had been raised in the three reference applications filed by the Revenue. The earlier reference applications were all along pending and the Revenue had pursued its remedies in relation to those applications. The fact that they were filed earlier could not defeat the rights of the Revenue to have the question raised if really there was any question of law. The application was not barred by limitation.

(b) Income-tax---

----Reference---Income from undisclosed sources---Finding based on evidence that there was no income from undisclosed sources---Finding of fact---No question of law arises for reference---Indian Income Tax Act, 1961, S.256.

The application was liable to be dismissed because no question of law arose from the order of the Tribunal. The first of the questions on which reference was sought related to the deletion of the value of 24 cartons of shrimp from the closing stock as well as the value of another 100-cartons again from the closing stock. 477 cartons had been processed. Admittedly there was no dispute about 453 cartons. The dispute centered only on 24 cartons. The Tribunal found on a discussion of the evidence that the balance 24 cartons would only be broken shrimps which had been misclassified. There was adequate material before the Tribunal to -come to the conclusion that the case of the assessee was true. So far as the 100 cartons were concerned, there was enough material before the Tribunal to come to the conclusion that the 100 cartons had been borrowed for the purpose of export from a sister concern of the assessee. The other item on which reference was sought related to the addition of Rs.1,71,403.79 The fact that this payment had been-made was not disputed. In fact, the entries in the accounts had not been disputed by the Department. The only contention raised was that this was done with a view to inflate the purchase price. The Tribunal found that this amount was not liable to be added. This finding was also supported by evidence on record.

C. Kochunni Nair for Petitioners.

P.K.R. Menon and N.R.K Nair for Respondents.

JUDGMENT

T. L. VISWANATHA IYER, J. ---All these petitions under section 256(2) of the Income Tax Act, 1961, arise out of a common order of the Income Tax Appellate Tribunal in appeals filed by the assessee and by the Department relating to the assessment year 1974-75. Numerous points were in issue before the Tribunal. The matter was heard in the first instance by the two members constituting the Tribunal. They concurred on some points and differed on certain others. Copies of their separate orders, dated July 22, 1987, are Annexures "C" and "D". Some of the points had been held against the Revenue by both the members and therefore the Revenue filed two reference applications R.A. Nos. 236 and 237 of 1987 to refer certain questions of law stated to arise out of the concurring orders of the two members. These reference applications were pending 'when the matter was heard on the points in difference by a third member to whom they were referred. He passed the order, Annexure "G", giving his opinion on the points of difference. That was on January 29, 1991. Consequential order incorporating his findings, Annexure "H", was passed on February 28, 1991. Thereupon and in view of certain findings against it, the Revenue filed another application, R.As. No. 69 of 1991, for referring certain questions of law arising out of that order. The assessee was also aggrieved by the finding rendered on the question of applicability of section 144-B in relation to the assessment in question which was one made after remand and, therefore, he also filed an application for reference raising the question of applicability of section 144-B to the proceeding.

All the reference applications were heard together by the Tribunal. In the meanwhile, the Tribunal had directed the Revenue to file a consolidated statement styled as revised reference applications incorporating the questions which had been, raised in the three reference applications filed by the Revenue. Such a statement was accordingly filed by the Revenue. When the matters came up for consideration before the tribunal, a preliminary objection was raised that the questions sought to be raised in R.As. Nos. 236 and 237 of 1987 cannot be entertained for the reason that they had been filed at the intermediate stages of the appeals, that they were not maintainable at that stage, that the Revenue had not sought reference of those questions after the order, Annexure "H", was passed and, therefore, the only questions that could be dealt with for reference were those raised in the reference application filed after the date of Annexure "H". This plea was not acceptable to the Tribunal and they held that all the questions raised were liable to be considered to see whether there was any referable question of law. The Tribunal, however, held by its order, Annexure "K", that the questions raised were questions of fact not liable to be referred to this Court for opinion under section 256(1) of the Act. The reference applications were, therefore, dismissed.

The Revenue has filed Original Petitions Nos. 14365, 14488 and 14494 of 1992 to refer the various questions sought by them in their three reference applications. The assessee has filed Original Petition No. 15260 of 1992 to raise the question regarding the applicability of section 144-B.

Before us also Sri G. Sivarajan for the assessee raised a preliminary objection that this Court cannot deal with the questions raised in R.As. Nos.236 and 237 of 1987, for the reason that those applications were misconceived and were not maintainable and if the Department decided to have the questions raised therein to be referred for the opinion of this Court, they should have sought reference of those questions as well in the reference application which they filed after the order, Annexure "H". We find it unable to accept this contention. What the two members who dealt with the appeal originally did by the orders, Annexures "C" and "D", was to concur on certain points end to differ on certain others. So far as the concurring points are concerned, both the members stated that the appeals are partly allowed. It was apparently because of this statement appearing in the concluding portion of the orders that the Revenue, Sought to file the reference applications as soon as those orders were made. The reference applications were pending at the time when the appeals were finally disposed of by the order, Annexure "H", and the subsequent reference application was filed. As stated earlier, all the three reference applications were dealt with together. The order of the Tribunal which has got to be considered by this Court for reference is one consisting of the two orders, Annexures "C" and "D", the order of the third member, Annexure "G", and the consequential order, Annexure "H". So far as the earlier two reference applications are concerned, the only defect is that they were filed earlier at a time when the formal order disposing of the appeal had- not been made. But the fact remains that the reference applications were filed earlier and were kept pending to await final disposal of the appeal. When the Revenue was undoubtedly entitled to file reference applications afresh within the period prescribed by section 256 of the Act after the order, Annexure "H", was passed, instead of formally filing an application-afresh what the Department did was to pursue its earlier reference applications alongwith the new reference application which dealt with the question arising out of the orders, Annexures "G" and "H". We are not prepared to uphold the contention of the assessee that the questions raised in R.As. Nos. 236 and 237 of 1987 stand barred merely because the consolidated statement called for by the Tribunal was filed beyond the period prescribed by section 256(1) after the order, Annexure "H". It may be noted that the reference applications were all along pending and the Revenue had pursued its remedies in relation to those applications. The fact that they were filed earlier because of the orders, Annexures "C" and "D", cannot defeat the rights of the Revenue to have the question raised if really there was any question of law. We do not find any substance in the preliminary objection raised by Sri G. Sivarajan, counsel for the assessee.

Now, we turn to the question whether there is any referable question of law arising out of the order of the Tribunal. The first of the questions on which reference is sought relates to the deletion of the value of 24 cartons of shrimps from the closing stock as well as the value of another 100 cartons again from the closing stock. . The members had differed on this question. So far as the 24 cartons are concerned, both the members have concurred that there was only misclassification of certain broken shrimps by the assessee in the closing stock. The materials gathered at the inspection had showed that 477 cartons processed before March 31, 1974, have been exported by the assessee after that date. Admittedly, there was no dispute about 453 cartons. The dispute centered only on 24 cartons. The Tribunal found on a discussion of the evidence that the balance 24 cartons would only be broken shrimps which had been misclassified. There was adequate material before the Tribunal to come to the conclusion that the case of the assessee was true and that it was not a case for addition of the value of 24 cartons. So far as the 100 cartons are concerned, there was difference of opinion between the two members and eventually the third member concurred with the judicial member in holding that 100 cartons had been borrowed for the purpose of export from a sister concern of the assessee. There was enough material before the Tribunal to come to this conclusion. The appreciation of evidence on this point cannot, for any reason, be stated to be either perverse or unreasonable, nor could it be said that the finding is not one supported by any evidence or materials. There is therefore no question of law so far as these items are concerned.

The third item on which reference is sought relates to the addition of Rs.1,17,403.79, a question on which the two members originally differed. The fact that this payment had been made was not disputed. In fact, the entries in the accounts had not been disputed by the Department. The only contention raised was that this was done with a view to inflate the purchase price. That again was a matter on which the Judicial Member as well as the Third Member addressed themselves and came to the conclusion differing from the Accountant Member that this amount was not liable to be added. This finding was also supported by evidence on record and we do not find any referable question on this point.

Some other questions have also been raised by the Revenue. So far as question No.8 is concerned, the mater was remitted back to the Commissioner (Appeals) for reconsideration. We do not find any justification for reference of any question on this score. Question No. 9 is related to the value of the closing stock on which we have found earlier that there is no referable question of law. So far as question No. 10 is concerned, that represented the value of goods which had become useless and not marketable, a fact which had been certified by the veterinary officer, and the finding rendered is only a question of fact on which no reference can be made. The last question stands concluded against the Revenue by the decision of this Court. There are two other questions raised by the Revenue which do not merit any separate consideration. They do not give rise to any referable question of law.

We do not therefore find any question of law arising out of the order in the reference applications filed by the Revenue. Original Petitions Nos. 14365, 14488 and 14494 of 1992 have therefore to be dismissed.

The assessee's application containing the question under section 144-B requires consideration only if we had referred the questions which the Revenue had sought in their, petitions. Since we are not referring any question of law as arising out of the order at the instance of the Revenue, we do not find any necessity to consider the assessee's application for reference. We, therefore, dismiss Original Petition No. 15260 of 1992 as unnecessary.

The result of the above discussion is that all the four petitions are dismissed.

M.B.A./1056/FPetitions dismissed