Judgment

SHAH, J.: This appeal is filed with certificate granted by the High Court of Patna under S. 66A (2) of the Indian Income-tax Act, 1922.

2. The Indian Machinery Stores (P) Ltd., is a private company incorporated with the object of taking over the business carried on by the India Machinery and Mills Stores - hereinafter called the vendors . By an agreement dated August 2, 1956, the Company agreed to purchase all the assets of the vendors, goodwill and the "book-debts and other liabilities and claims against the Company" as on the date of transfer in consideration of allotment of 260 fully paid-up shares of the Company of the nominal value of Rs. 2,60,000/-. It was provided by cl. 4 of the agreement:

"That all assets of the vendors in respect of all its business shall be taken over at the book value standing in the books of accounts of the vendors as on the 1 August One Thousand Nine Hundred Fifty-six."

3. In a proceeding for assessment to tax for 1958-59, the Income-tax Officer found that in the books of the vendors the "value of stock" as on August 1, 1956 was Rs. 1,77,285/- while in the books of the Company the opening stock taken over by the Company was valued on the same day at Rupees 2,10,285/-. The Income-tax Officer held that the valuation by the Company of the opening stock was in "clear violation of the terms of agreement between the vendors and the Company" and added a sum of Rs. 33,000/- representing the difference between the value of the closing stock I n the books of account of the vendors and the opening stock in the books of account of the Company. The order was confirmed in appeal by the Appellate Assistant Commissioner and by the Income-tax appellate Tribunal.

4. The High Court of Patna recorded their answer in the affirmative on the following question referred by the Tribunal :

"Whether on the facts and circumstances of the case and upon a construction of the agreement of 2nd August 1956, the Tribunal was justified in holding that the sum of Rupees 33,000/- forms part of the assessable profits of the assessee Company ?"

A Division Bench of the High Court certified the case under S. 66A (2) of the Act as fit for appeal to this Court, observing :

"That the case fulfils all the requirements of S. 66A (2) of the Indian Income-tax Act, 1922, and is a fit case for appeal to the SC."

5. At the hearing of the appeal on behalf of the Commissioner of Income-tax, it is contended that the appeal is incompetent, since the High Court is certifying the case as fit for appeal to this Court did not set out the question of law which this Court has to decide. It was urged that the certificate or the order certifying the case must disclose that some substantial question of public or private importance arises in the case, and on that account the case is certified to be fit for appeal. In our judgment, the contention must be accepted.

6. Section 66A of the Indian Income-tax Act, 1922, which was added by the Indian Income-tax (Amendment) Act 24 of 1926 by sub-s. (2) provides :

"An appeal shall lie to the SC from any judgment of the High Court delivered on a reference made under section 66 in any case which the High Court certifies to be a fit one for appeal to the SC."

The phraseology of sub-s. (2) of S. 66A of the Income-tax Act is substantially the same as used in S. 109 (c) of the Code of Civil Procedure, 1908, Art. 133 (1) (c) and Art. 134 (1) (c) of the Constitution. The Judicial Committee in Delhi Cloth and General Mills Company Ltd., v. Income-tax Commissioner, Delhi, 54 Ind App 421 = (AIR 1927 PC 242) observed:

" ..... it will be noticed that the appeal thereby given is by sub-s. (2) confined to a case which the High Court certifies "to be a fit one for appeal to His Majesty in Council". These words are textually the same as the concluding words of S. 109 (c) of the Code of Civil Procedure, and coupled with the carefully limited referential words to the Code of Civil Procedure in sub-s. (3) suffice, the their Lordships judgme