Prem Chand Jain, J.
1. The Income-tax Appellate Tribunal, Amritsar Bench, on the applications filed by M/s. Sujan Singh Sadana under Section 256(1) of the I.T. Act, 1961 (hereinafter referred to as 'the Act'), has referred the following question of law for our decision :
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the sums of Rs. 1,60,806 and Rs. 6,290 were liable to tax in the hands of the assessee for the assessment years 1967-68 and 1968-69, respectively?'
2. M/s. Sujan Singh Sadana (hereinafter to be referred as 'the assessee') carries on business in money-lending and military contracts. The assessee had taken contract from the military authorities for the supply of meat, fresh buffalo milk, vegetables, charcoal and other things. The assessee did not work these contracts itself but, as in the past, the work was got executed through Sub-contractors. During the assessment year 1967-68, relevant to the accounting period ending 31st March, 1967, and 1968-69, relevant to the accounting period ending 31st March, 1968, the assessee got military supplies executed through three Sub-contractors, namely, M/s. Akash Corporation, M/s. Khanoo Ram and Co., and M/s. Friends & Co. The above-named Sub-contractors, employed by the assessee, supplied goods to the military authorities on behalf of the assessee under the terms and conditions of the agreement entered into by the assessee with these Sub-contractors. One of the provisions of the agreement which talks of the commission of the assessee reads as under :
'The sales tax, if any, shall be borne by us (sub-contractors).
That we shall submit bills duly supported by the relevant 1,520 receipts for the supply of meat dressed on hoof, all items, fresh buffalo milk, and charcoal common, which we shall obtain from the supply depot concerned and after preparing the bills at the above mentioned contract rates we shall deduct 3% (three per cent.) for meat dressed/meat on hoof, Jammu and Naushera and 5% (five per cent.) for all items, khanabit, fresh buffalo milk, samba and charcoal, common samba Bills, which deduction shall be considered as contractors' commission or profit.'
3. For the assessment years 1967-68 and 1968-69, the assessee did not disclose any income from commission from the abovesaid three subcontractors, on the ground that as the Sub-contractors had suffered heavy losses, it had agreed to forgo the commission of Rs. 1,60,806 due to it from the above-named three Sub-contractors.
4. During the course of scrutiny of the assessee's claim, the ITO took the view that no portion of the commission had been forgone by the assessee up to the end of the accounting year 31st March, 1967. The ITO also took the view that the income was liable to taxation on accrual basis and since the commission had accrued to the assessee during the year under consideration, it was liable to be assessed to tax during the relevant assessment years. Consequently, a sum of Rs. 1,60,806 was included towards the total income of the assessee for the assessment year 1967-68 and a sum of Rs. 6,290 for the assessment year 1968-69.
5. On appeal, the AAC upheld the order of the ITO. Still dissatisfied, the assessee filed an appeal before the Income-tax Appellate Tribunal. On a consideration of the entire matter, the Tribunal held that the right to receive the commission from the Sub-contractors was acquired by the assessee as soon as the billed amount was received from the military authorities by the assessee, in its books of account. The Tribunal further found that as at the close of the accounting periods under consideration, the assessee had not forgone the amount of commission due to it, the question of surrendering the amount of commission by the assessee as on 31st March, 1967, and 31st March, 1968, did not arise. In view of the aforesaid findings, the Tribunal upheld the order of the AAC.
6. Considering that some questions of law arose, the assessee filed two reference applications under Section 256(1) of the Act. Both the applications were consolidated and on a consideration of the entire matter, the question which has been reproduced in the earlier part of the judgment has been referred for our decision.
7. After hearing the learned counsel for the parties, we find that, in the circumstances of the case, no question of law arises for our decision.
8. Before us, Mr. B.S. Gupta, learned counsel for the assessee, submitted that it was established on the record that the assessee had forgone its commission in these two years. A similar contention had been raised before the Tribunal. On a consideration of the entire material, the Tribunal recorded a firm finding that no evidence had been led by the assessee to establish its claim that the amount of commission was given up on account of business or commercial expediency. Having arrived at the aforesaid finding, which is based on a consideration of the evidence and other relevant facts, we find that there was no justification for the Tribunal to have referred the aforesaid question as no point of law isinvolved which may need determination by us. The question whetherthe commission was forgone by the assessee or not is a pure question offact. It may be observed at this stage that no argument was advanced bythe learned counsel for the assessee that the income arising from thecommission from the sub-contractors could not be treated as the incomeof the assessee during these assessment years as the same had not actuallybeen received.
9.Thus, considering the whole matter, as observed earlier, no question of law arises for our decision. Consequently, the reference is declined and returned unanswered.