- (1.) THIS is an application by the petitioner Messrs. Gotan Lime Syndicate, Gotan, for a certificate for appeal to the Supreme Court, arising out of a reference under section 66 (1) of the Indian Income-tax Act, 1922, which was answered by us against the petitioner by our order dated the 9th October, 1963.
(2.) THE facts leading up to the reference have been narrated at length in our order which is sought to be appealed against and need not be reiterated. Suffice it to say that the petitioner is a registered firm carrying on business in the manufacture of lime from lime-stone and obtained on lease from the State Government a certain area of land in connection with that business for a certain period and annually paid a sum of Rs. 96,000/-to the Mines Department of the State as lease money. The petitioner claimed that this was a recurring or a periodical expenditure, and, therefore, was an expenditure of a revenue nature for which deduction should be allowed to it under Section 10 (2) (xv) of the Income-tax Act of 1922. Although this plea was rejected by the Income-tax Officer and the Appellate assistant Commissioner, it prevailed with the Income-tax Appellate Tribunal bombay Bench B, whereupon a reference was made to this Court under Section 66 (1) of the Income-tax Act at the instance of the Commissioner of Income-tax, delhi and Rajasthan, New Delhi. The question which thus arose for decision before this Court was whether on the facts and circumstances of the case, the sum of Rs. 96,000/-paid by the assessee petitioner during each of the relevant accounting years was rightly allowed as a revenue deduction in competing the business profits of the assessee company. We answered, this question in the negative and held that the expenditure with which we were concerned in this case was not incurred for the mere acquiring of the stock-in-trade or raw material for the assesses but was incurred for the acquisition of a source from, and/or the means by, which the stock-in-trade was to be acquired, and was, therefore, in the nature of an acquisition of an asset or advantage for the enduring benefit of the assessee's business, and that being so, it was tantamount to capital expenditure for which no deduction could be allowed to the assessee under Section 10 (2) (xv) of the Income-tax Act. We further held that the circumstance that the assessee was required to make an annual and recurring payment to the State and that that payment might have varied from year to year under certain contingencies, did not make any substantial difference to the conclusion to which we came. It is against this decision that the petitioner now applies for a certificate for appeal to the Supreme Court under section 66-A of the Income-tax Act, 1922, or Section 261 of the Income-tax Act, 1961. As the provisions of both these sections are identical, it is immaterial whether the present application is treated as having been made under the one or the other section.
(3.) THE sole question for decision before us is whether we should certify this case to be a fit one for appeal to the Supreme Court. It has been strenuously contended before us on behalf of the department that we should hold against the petitioner on this point, as, in coming to the conclusion to which we did, we have relied on the guiding tests as laid down by the Supreme Court in Pingle Industries ltd. v. Commr. of Income-tax, (1960) 40 ITR 67 : (AIR 1960 SC 1034) and Abdul kayoom v. Commr. of Income-tax, (1962) 44 ITR 689 : (AIR 1962 SC 680) and certain English cases cited with approval therein, and, therefore, the case does not involve any substantial question of law but really boils down to a matter of the application of that law to the facts and circumstances of a particular case. Our attention was invited in this connection to the decision of the Supreme Court in state of Jammu and Kashmir v. Thakur Ganga Singh, AIR 1960 SC 356 in support of this submission. In the last-mentioned case, it was held that a substantial question of law cannot be said to arise where the law has been finally and authoritatively decided by the Supreme Court and what remains to be done by the high Court is only to apply that interpretation to the facts before it.;