- (1.) M/s. Ashoka Marketing Ltd. carries on the business of selling agent for various companies and in stocks and shares, jute and speculation. In the account year ending 31/08/1951, the company earned a profit of Rs. 59,91,721. 00 in certain transactions. In the proceeding for assessment of income under the Income Tax Act, 1922 for the assessment year 1952-53,the company claimed that out of the profits received, the amount of Rs. 14,30,561. 00 was not taxable because the company had acted in purchasing and selling jute as agent of Dalmia Cement Paper Marketing Company Ltd. hereinafter referred to for the sake of brevity as "d. G. P. M. Ltd. ". This contention was rejected by the Income Tax Officer, and by the Assistant Commissioner of Income Tax. The order was confirmed by the Income Tax Appellate tribunal. The tribunal found that the claim of the company would not be accepted, because (1) there was no evidence, documentary or otherwise contemporaneous with the transactions requiring the assessee to undertake transactions of sale and purchase on behalf of D. C. P. M. Ltd. , (2) that no entries had been made in the books of the assessee as pertaining to D. C. P. M. Ltd. either immediately or periodically after the transactions, (3) that no money was advanced by the D. G. P. M. Ltd. nor was any debit raised of any interest payable by D. G. P. M. Ltd. in respect of the various purchases till the completion of the corresponding sales; and (4) that the books of the company did not contain any record of brokerage, commission or any benefit accruing to the assessee for the services rendered as the alleged agent of D. C. P. M. Ltd.
(2.) The finding of the tribunal that the transactions in jute were of the company and not on behalf of D. C. P. M. Ltd. was clearly a finding on a question of fact. The tribunal was however persuaded to submit to the High court of Patna a statement of case under S. 661) of the Indian Income Tax Act, 1922 on the following question : "Whether in the facts and circumstances of the case, the tribunal was right in holding that the profit of Rs. 14,30,561. 00 on jute transactions were the profits of the assessee-company liable to be included in its total income. "the High court recorded a finding in the negative and in favour of the company. The learned Judges of the High court were in reaching their conclusion impressed by two circumstances: (1) that the amount of Rs. 14,30,561. 00 sought to be assessed in the hands of the company had previously been assessed to tax in the hands of the D. G. P. M. Ltd; and (2) that there was on the record of the court a credit advice, dated 31/08/1951, sent by the D. C. P. M. Ltd. This appeal has been filed before us with certificate granted by the High court, observing, that the appeal raised "substantial questions of law of far-reaching private importance between the parties. "
(3.) There has been a sequence of exceptional orders; the tribunal after deciding the appeal on appreciation of evidence drew up a statement of case in relation to a question which was essentially one of fact; the High court recorded an answer disagreeing with the tribunal on matters of appreciation of evidence, and then proceeded to grant a certificate to this court without specifying the "substantial questions of law of far-reaching importance".;