Gulati, J. - (1.) THIS and the connected references under Section 66(1) of the Indian Income-tax Act, 1922, raise a common question relating to the same assessee for assessment years 1954-55, 1955-56 and 1956-57, and hence they are being disposed of by this common judgment.
(2.) THERE were two sugar companies at Rampur known as the Raza Sugar Company Ltd. and Buland Sugar Company Ltd. which were merged with effect from November 1, 1955, by an order of this court in 1957, Consequent upon this merger the name of Buland Sugar Company was changed into Raza Buland Sugar Company. The assessee in the present references is Raza Buland Sugar Company Ltd. but references in fact relate to the assessments of Buland Sugar Company. The two sugar companies had formed a partnership firm known as the Agricultural Company. The Agricultural Company suffered a loss. It was assessed as unregistered firm for the assessment years in question. The Buland Sugar Company Ltd. (hereinafter referred to as "the assessee") claimed to set off its share of loss in the Agricultural Company against its own profits of the relevant year. This claim was disallowed by the Tribunal on the basis of a decision of this court relating to the other partner, namely, The Raza Sugar Company, reported as Raza Sugar Co. v. Commissioner of Income-tax, 1970 76 ITR 541. There the High Court held that as the Agricultural Company had been assessed as unregistered firm and its assessment had become final, no partner could claim to set off its share of loss against its individual income by reason of the provisions contained in the second proviso to Section 24(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as "the Act"). At the instance of the assessee, the Tribunal has, however, referred the following question of law for the opinion 6f this court: "Whether, on the facts and in the circumstances of the case, the assessee, a partner in the Agricultural Company assessed as an unregistered firm, is entitled to set off its share of loss therefrom against its other income ?." When the matter came up before a Division Bench of this court, of which one of us was a member (Hon'ble Gulati J.), it was felt that the decision of the High Court in the case of Raza Sugar Company v. Commissioner of Income-tax required reconsideration and that is why the matter is before us.
(3.) WHEN these references came up before us, the department's counsel drew our attention to a judgment of the Supreme Court passed on the special leave petition against the judgment of this court in the case of Raza Sugar Company. It appears that the High Court had granted a certificate to the assessee to appeal to the Supreme Court but it did not give any reason in support of the certificate and hence the Supreme Court did not admit the appeals on the basis of the certificate. The assessee then moved special leave petitions which were rejected with the following observation : "These appeals are brought on the strength of a certificate issued by the High Court of Allahabad. The High Court has not given any reasons in support of the certificate issued. Hence, the appeals in question are not maintainable. Realising that difficulty the assessee has moved the special leave petitions above mentioned. We have heard the assessee's counsel at length on the special leave petitions. We do not think that these are fit cases to be heard by this court. In the result the appeals as well as the special leave petitions are dismissed. No costs." We are of the opinion that after the judgment of the Supreme Court no scope is left for us to enter into the question. When the Supreme Court dismissed the special leave petition after hearing the counsel for the assessee at length on the ground that the cases were not fit to be heard by that court, it is proper to presume that the special leave petitions were dismissed because they lacked merit. We have accordingly no choice except to answer the question in the negative.;