- (1.) The is an appeal by special leave from the judgment of the Patna High Court delivered on a Reference made by the Income-tax Appellate Tribunal under S. 68(1), Income Tax Act.
(2.) The Tribunal referred the following two questions for the opinion of the High Court : (1) On the facts and in the circumstances of this case is the surplus of Rs. 13,05,144/- arising out of the sale of the plant and machinery of the sugar factory chargeable under S. 10(2) (vii) (2) Was the profit of Rs. 15,882/- on the sale of stores of the factory taxable under the Income-tax Act in the circumstances of this case The Reference came up for hearing before a Division Bench consisting of Shearer and Sarjoo Prasad, JJ., and after a prolonged hearing the learned Judges delivered separate judgments on 27-2-1951 giving divergent answers to the questions, Shearer, J. answering both the question in the negative and Sarjoo Prasad, J., giving an affirmative answer to both of them. The matter thereupon was placed before a third Judge, Ramaswami, J., who after a fresh hearing delivered his judgment on 16-5-1951 agreeing with Sarjoo, Prasad, J, on the first question and with Shearer, J., on the second question. The result was that the High Court by a majority decision answered the first question in the affirmative, i.e., against the assessee and the second question in the negative, i.e. in favour of the assessee.
(3.) The assessee applied to the High Court for leave to appeal to this Court against the High Court decision on the first question. The High Court having declined to grant the necessary certificate the assessee applied for and obtained the special leave of this Court to prefer the present appeal. The department has not preferred any appeal against the High Court decision on the second question and nothing further need be said about the question.;