- (1.) Two questions were referred by the Income-tax Appellate Tribunal to the High Court of Bombay under S. 66 (1) Income-tax Act. 1. Whether there is any material to justify the assessment of Rs. 30,000 (Rupees thirty thousand) from out of the sum of Rs. 61,000 (Rupees sixtyone thousand) (for Income-tax and Excess Profits Tax and Business Profits Tax purpose) representing the value of high denomination notes which were encashed on the eighteenth day of January one thousand nine hundred and fortysix, and 2. Whether in any event by reason of the orders of the Revenue Authorities not having found that the alleged item was from alleged undisclosed business profits the assessment of Rs. 30,000 (Rupees thirty thousand) is in law justified for Excess Profits Tax and Business Profits Tax purposes
(2.) The High Court answered the first question in the affirmative but refused to answer the second question, being of the opinion that even though it had asked the Tribunal to refer that question under S. 66(2) of the Act, it had no jurisdiction to do so inasmuch as the appellants had not asked the Tribunal to refer the second question and, therefore, no question arose of the Tribunal refusing to raise that question or to submit it for the decision of the High Court.
(3.) The appellants are a partnership firm doing business in Mill Stores at Ahmedabad. Their head office is in Ahmedabad and their branch office is in Bombay. The Governor-General on 12-1-1946 promulgated the High Court Denomination Bank Notes (Demonetisation) Ordinance, 1946 and High Denomination Bank Notes ceased to be legal tender on the expiry of 12th day of January 1946. Pursuant to clause 6 of the Ordinance the appellants on 18-1-1946 encashed high donomination notes of Rs. 1,000 each of the face value of Rs. 61,000. This was done in the calender year 1946 being the account year corresponding with assessment year 1947-48.;