Income-tax---

----Reference---Question of law---Firm---Registration---Firm carrying on business of lifting arrack from Government---'Tribunal reducing estimate of net profit---Tribunal upholding decision of CIT (Appeals) regarding grant of registration to firm---Tribunal holding that no question of law arises-- Question sought to be referred are questions arising on appreciation of facts---Order of Tribunal justified---Indian Income Tax Act, 1961, S. 256(2).

For the assessment year 1984-85, the assessee-firm which was engaged in the business of liquor did not file any return nor did it produce any accounts. The Income-tax Officer determined the income of the assessee at Rs.1,85,000. On appeal, the Commissioner of Income-tax (Appeals) reduced the taxable income to Rs.40,000 having regard to some comparable profits of other assessees. On further appeal, the Tribunal upheld the order of the Commissioner of Income-tax (Appeals). The Tribunal also upheld the decision of the Commissioner (Appeals) regarding grant of registration to the assessee-firm. The Tribunal rejected the application of the Revenue under section 256(1) of the Income Tax Act, 1961, to refer questions of law on the ground that no question of law arose from its order. On an application filed by the Revenue under section 256(2):

Held, that the Tribunal was right in coming to the conclusion that no questions of law arose as the questions sought to be referred were questions arising on appreciation of facts.

S. R. Ashok; D. Srinivas and J. V. Prasad for the Commissioner.

Nemo for the Assessee.

JUDGMENT

SYED SHAH MOHAMMED QUADRI, J.--In this application under section 256(2) of the Income Tax Act, 1961, the Revenue seeks a direction to the Income-tax Appellate Tribunal to refer the following questions of law to this Court for opinion:

"(1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is justified in reducing the income to Rs.40,000 from Rs.1,85,000 for the assessment year 1984-85?

(2) Whether, on the facts, and in the circumstances of the case, the Income-tax Appellate-Tribunal is correct in upholding the decision of the Commissioner of Income-tax (Appeals) regarding granting of registration?"

In the, assessment year 1984-85, the assessee who was engaged in the business of liquor did not file any return of its income nor did it produce any accounts; having regard to the estimate of profits made by the Income tax Officer, the income of the assessee was determined at Rs.1,85,000. On appeal by the assessee, the Commissioner of Income-tax (Appeals) reduced the taxable income to Rs.40,000 having regard to some comparable profits of other assessees. The Revenue went in appeal before the Income-tax Appellate Tribunal. The Tribunal having considered the facts of the case upheld the order of the Commissioner while dismissing the appeal on January 23, 1995. The Tribunal declined to refer the above questions raised in the reference applications filed under section 256(1) of the Income-tax Act by the Revenue on the ground that no question of law arises from the order of the Tribunal. Having perused the orders of the Tribunal, we are of the opinion that the Tribunal is right in concluding that no question of law arises as the above questions sought to be referred to this Court are questions arising on the appreciation of facts. The income-tax case is, therefore, dismissed.

M.B.A./3271/FC Order accordingly.