K.S. Paripoornan, J.
1. At the instance of the Revenue, the following question of law has been referred by the Income-tax Appellate Tribunal (in short, 'the Tribunal') for the decision of this court:
'Whether, on the facts and in the circumstances of the case, the rediscounting charges and the commission received on purchase of inland bills were not includible in the chargeable interest ?'
2. The respondent is a banking company. We are concerned with the assessment years 1977-78 and 1978-79. While completing the assessments for the above two assessment years for which the accounting periods ended on December 31, 1976 and December 31, 1977, respectively, the rediscounting charges paid to the Industrial Development Bank of India, amounting to Rs. 2,05,258 and Rs. 3,20,378, respectively, for the above two assessment years were not allowed as deductions from the gross receipts on the ground that they were only application of interest after receipt and not a diversion before accrual. Similarly, the commission received on purchase of inland bills amounting to Rs. 11,49,907 and Rs. 11,22,417, respectively, were included by the Income-tax Officer in the chargeable interest for the above years, treating the same as discount on bills of exchange drawn or made in India coming within the definition of 'interest' in the Interest-tax Act. In the appeals, the Commissioner of Income-tax (Appeals) followed the order of the Tribunal in I. T. A. Nos. 3 (Coch/1978-79, dated, March 20, 1981, and held that the aforesaid amounts were not includible in the chargeable interest. I. T. A. No. 3(Coch)/1978-79 is a case where the Federal Bank Limited was a party. In the further appeals at the instance of the Revenue, the Tribunal concurred with the decision of the Commissioner of Income-tax (Appeals). The appeals filed by the Revenue were dismissed. It is, thereafter, at the instance of the Revenue that the Tribunal has referred the above question of law for the decision of this court.
3. We heard counsel. The Federal Bank Limited's case (I. T. A. No. 3 (Coch)/1978-79) came up before this court in I. T. R. Nos. 53 and 54 of 1982. I. T R. Nos. 53 and 54 of 1982 were disposed of by a common judgment dated June 18, 1987 (CIT v. Federal Bank Ltd. : [1991]189ITR117(Ker) ). Therein, the question regarding the re-discounting charges specifically came up for consideration. This court held that the re-discounting charges paid to the Reserve Bank of India and the financing institutions in that case cannot be taken as deductions from out of what was earned by the assessee and it was a case where the Reserve Bank and the financing institutions on the one hand and the assessee on the other, were sharing the profits in a certain ratio and the profits so earned by the Reserve Bank of India and the financing institution never accrued to the assessee and it cannot be considered as the income of the assessee bank. In the light of the above decision rendered in I. T. R. Nos. 53 and 54 of 1982, : [1991]189ITR117(Ker) , we should hold that the rediscounting charges paid to the Industrial Development Bank of India for the two years should be allowed to be deducted from the gross receipts and, in this view of the matter, they were not includible in the chargeable interest. We answer that portion of the question referred to us in the affirmative, against the Revenue and in favour of the assessee.
4. The question contains another aspect also, viz., whether the commission received on purchase of inland bills was not includible in the chargeable interest. Though the Commissioner of Income tax (Appeals) and the Tribunal purported to follow the earlier decision of the Tribunal in I. T. R. No. 3(Coch)/1978-79 to hold that the commission received on purchase of inland bills was not includible in the chargeable interest, along with the statement of the case, the earlier decision of the Tribunal, rendered in I. T. A. No. 3(Coch)/1978-79 has not been forwarded as an annexure. We are not in a position to inform ourselves about the reasoning of the Tribunal in I. T. A. No. 3(Coch)/1978-79. That aspect of the question has not been considered in detail by the Appellate Tribunal which only followed its earlier decision in Federal Bank Limited's case (I. T. A. No. 3(Coch)/ 1978-79). The Tribunal had a duty to forward its earlier judgment in Federal Bank Limited's case along with the statement of the case herein. It failed in its duty to do so. Be that as it may, in the absence of the said order of the Tribunal, we are not in a position to know the reasons for holding that the interest representing commission received on purchase of inland bills is not includible in the chargeable interest. Therefore, we decline to answer the second part of the question regarding the commission received on purchase of inland bills. We direct the Tribunal to restore the appeal to file on that part of the case and decide the matter afresh. The reference is answered accordingly.
5. A copy of this judgment under the seal of this court and the signature of the Registrar will be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.