P. JAGANMOHAN REDDY, J.

(1) THIS appeal is by special leave against the judgment of the High court of Rajasthan in an income-tax reference under Section 66 (1) by which it answered the two questions referred to it in the negative. Before this appeal was filed, Appeal No. 1238 of 1969, had been filed on a certificate, but that was dismissed because this court had in several cases held that in an income-tax reference if the High court does not give any reasons while granting the certificate, the certificate can be revoked.

(2) THE assessee, a firm carrying on mining business at Udaipur with a branch at Mandal, had, pursuant to an invitation to tender for mica mining in accordance with the terms and conditions prescribed in the Mineral Concession Rules, tendered for certain areas for Rs. 1,57,150.00 of which Rs. 3,360.00 was payable towards the mica scrap lying on the surface. The lease was for twenty year and the areas which were offered had been worked by other private companies for fifteen years. This offer of the appellant was accepted and the lease was granted to it. In the /relevant assessment year 1952-53 for which the previous year for the head office ended on 30/10/1951, and for the branch ended on 30/03/1952, the appellant claimed Rs. 7,857.00 being the l/20th of the tender money as revenue expenditure incurred during that year. The claim of the assessor was rejected by the Income Tax Officer on the ground that the money was paid for the value of the land which it had acquired because the mine granted to the assessee had already been worked by the private companies. In an appeal against this order, the Appellate Assistant Commissioner confirmed the disallowance of the expenditure as, in his view, it was of a capital nature expended for the acquisition of a capital asset. Against this order, an appeal was filed to the Appellate tribunal. The tribunal, however, allowed Rs. 3,360 paid for mica scrap lying on the, surface as a revenue expenditure incurred in the acquisition of stock-in-trade, but disallowed the claim for the balance of Rs. 1,53,800.00 which was paid under the tender as a capital expenditure.

(3) THE assessee had also claimed Rs. 3,200.00 as the fee paid by it at the rate of Re. 1 per acre per year for prospecting licence. The Income Tax Officer disallowed this amount under S. 10(2)(xv) of the Indian Income Tax Act, 1922 (hereinafter called "the Act"), on the ground that the licence was obtained by the assessee only that year, that the fee was paid in addition to the royalty payable on the value of the emeralds excavated and sold and that it was an initial expenditure for procuring a right to prospect mines. The Appellate Assistant Commissioner in an appeal by the assessee negatived the claim on the ground that under that licence the assessee had a right to win and commercially exploit the minerals which the assessee actually carried out. The tribunal, while dismissing the appeal filed against the order of the Appellate Assistant Commissioner, observed that the prospecting licence fee cannot be equated to a payment made for the purchase of stock-in-trade, that it was not based on any quantity of minerals, that the minerals had to be won and extracted from the earth and the term "prospecting licence" shows that the mine had not yet started working as a mine and that the payment was to initiate the business. It also held that the period of one year for which the licence was obtained cannot justify the fee paid as a revenue expenditure. The assessee, thereafter, filed an application under S. 66(1) of the Act and, as in its opinion a question of law did arise, the tribunal referred the following two questions to the High court for its opinion:

" 1. Whether, on the facts and in the circumstances of the case, the prospecting licence fee of Rs. 3,200.00 is allowable as revenue expenditure ?

2. Whether, on the facts and in the circumstances of the case, the appropriate part of Rs. 1,53,80