The High Court has no power to direct additional evidence to be taken in a reference under S. 66 of the Income-tax Act.

Judgment

KAPUR, J. : These two appeals pursuant to a certificate are from the decision of the High Court of Bombay in Income tax Reference No. 16 of 1955 answering the qustion referred by the Income-tax Appellate Tribunal in the Affirmative and against the assessee company. The appellant in both the appeals is assessee company and the Commissioner of Income-tax is the respondent.

2. The facts of these appeals are shortly as follows; The assessee company was registered in the erstwhile Baroda State and its status during the assessment years was that of a non resident. The relevant assessment years were 1941-42and 1942-43 the previous years being the calendar years 1940 and 1941.It carried on the business of dyeing and selling dyed yarn. It effected sales of dyed yarn of the total value of Rs. 14,22,995/- and Rs. 19,22,107/- in the previous years relevant to the assessment years 1941-1942 and 1942-43 respectively. The sales were made to purchasers both in the Indian States and in what was British India. During the previous year relevant to 1941-42 out of the total sales of the value of Rs. 14,22,996/Rs. 11,88,063/- were, to merchants in British India and out of these some sales were to Calcutta merchants which are not now in dispute and the balance amounting to Rs. 9,53,304/- were to purchasers in other parts of British India and dispute in regard. to that year relates to the assessment on the profits of those sales. Similarly in the previous year relevant to 1942-43 out of total sales for a sum of Rs. 6,04,558/- were made to purchasers in British India and assessment in regard to profits out of that sum is in dispute. The Income-tax Officer found that the sales price was received by the assessee company at Perlad in the erstwhile Baroda State by means of cheques., Drafts and hundies in the years relevant to the two assessment years and it is not disputed that they were sent by post. These cheques Drafts and hundies were sent back by the assessee company either to its creditors in British India in payment of its Liabilities or to the credit of its accounts with its bankers in British India. The contention of the assessee company was that these sums were received by it at Perlad in the erstwhile Baroda State and therefore the profits or these sales were not taxable in the taxable territories in as much as they received in an Indian State. After appeal to the Appellate Assistant Commissioner appeal was taken to the Income-tax Appellate Tribunal which held, that the cheques and hundies which were sent by the assesses company to its bankers and creditors were received by them as agents of the assessee company and therefore the profits were received in British India and were liable to tax. Against that Order the assesses company applied under S. 66 of the Income-tax Act for a statement of the case to the High Court. On February 21, 1955 the Appellate Tribunal referred the following question to the High Court:

"Whether the proportionate profit on the sale proceeds aggregating Rs. 9,53,304/- for the assessment year 1941-42 and Rs. 6,04,588/- for the assessment year 1942-43 or any part there of were received by or on behalf of the assessee company in British India.?"

The Appellate Tribunal in the statement of the case remarked that no attempt had been made at a previous stage to investigate as to whether the post office had acted as the agent of the assessee company or the buyers. The High Court on September 23, 1955 made the following Order calling for a supplement statement:

"The same question arises on this reference as in the last reference (I.T Reference No. 15 of 1955) and we want supplemental statement of the case on the same lines as we have indicated in the last reference. The supplemental statement of the case will be confined to the two amounts mentioned in the question raised on this reference viz., Rs. 9,53,304/- for the assessment year 1941-42 and Rs. 6,04,585/- for the year 1942-43."

The parties by this Order were allowed to ad