( 1 ) AT the instance of Commissioner of Income-tax, Mysore, Bangalore, the Income-tax Appellate tribunal, Hyderabad Bench, in I. T. A. No. 5488 of 1958-59 on its file, referred to this court the question "whether the sum of Rs. 1,87,630 is, by is nature, taxable sum under the Indian income-tax Act, 1922?" under section 66 (1) of the Indian Income-tax Act, 1922 (to be referred to hereinafter as the "act" ).

( 2 ) IT would be appropriate to recast this question as follow :

"whether on the facts and circumstances of this case the sum of Rs. 1,87,630 refunded by the government to the assessee by adjustment is, by its nature, a taxable sum under the Indian income-tax Act, 1922?"

( 3 ) THE relevant facts as found by the Tribunal and set out in the statement of the case and the fuller statement of the case submitted to this court are as follow : the assessee was an excise contractor. He had liquor shops at Mahabubnagar, Macherala, raichur and Narayanpettah. The kist due from him for Faslis 1357 and 1358 was O. S. 10,75,629. Out of this amount, the assessee paid O. S. 9,81,308 and claimed deduction of the same as revenue expenditure in the assessment years 1949-50 and 195