Judgment:
ORDER
On an application filed under section 256 of the Income Tax Act, 1961, the Tribunal has referred the following question for the opinion of this court :
'Whether on the facts and in the circumstances of the case, the Tribunal was justified in allowing the assessee's claim for liability of Rs. 1,27,058 ?'
2. The assessee derives income from same business as in the past. The relevant assessment year is 1983-84. During the year in hand, assessee claimed Rs. 1,27,058 being the demand of Rajasthan Sales Tax and Central Sales Tax pertaining to the accounting year ended on 30-9-1975 and 30-9-1976.
3. The claim of the assessee was rejected by the Income Tax Officer on the ground that the demand did not relate to this year. The Income Tax Officer has further pointed out that the demand raised has already been quashed in the year 1983-84 by Deputy Commissioner (Appeals) of the Sales Tax Department. The view taken by Income Tax Officer has been confirmed by Commissioner (Appeals).
4. In appeal before the Tribunal, the Tribunal has followed its earlier order given in the earlier years i.e., 1981-82 & 1982-83 and allowed the claim of the assessee regarding deduction of amount of Rs. 1,27,058.
5. Thereafter, one miscellaneous application has been moved pointing out to the Tribunal that the demand of sales tax has been quashed in this very year i.e., 1983-84 but Tribunal has not commented on that argument and rejected the miscellaneous application holding that now the matter is pending before the High Court.
6. Mrs. Jain, learned counsel for the department submits that Income Tax Officer has disallowed the claim of the assessee regarding the deduction of Rs. 1,27,058 on the ground that liability pertains to assessment year 1975-76 and also that this very demand has been quashed by Deputy Commissioner (Appeals) in Sales Tax Department in this very year i.e., 1983-84. Therefore, she submits that when demand itself has been quashed in the year 1983-84, there is no question of any deduction on account of liability of Rs. 1,27,058.
7. Mr. Mehta, learned counsel for the assessee submits that the Tribunal has observed that the liability though pertains to the earlier year i.e., 1975-76, that cannot be denied in the year under hand. When the demand has been raised by the Sales Tax Department in this year. There is no spur of word regarding the fact that the demand has been quashed in this year and when this fact does not born out from the order of the Tribunal in reference, this court should not go into the fact which has not been referred or found by the Tribunal.
8. The facts are not in dispute that the liability of Rs. 1,27,058 on account of sales tax demand relates to the assessment year 1975-76. In the main order of Tribunal, in appeal, the Tribunal has just followed its view on the issue taken in the assessment year 1982-83 in the case of this very assessee. In 1982-83, in the case of this very assessee, the similar issue has been considered and concluded by the Tribunal in para 20 of its order, which reads as under :
'In our opinion, the claim of the assessee for allowance of this amount is quite in order because till demand was raised the assessee did not know that such a demand would be raised and could not, therefore, provide for it in its books of account. This is not the normal types of sales tax on sale of goods which the assessee must anticipate and Commercial Tax Officer held that loading charges are subject to sales tax liability. Merely, because the liability pertains to earlier year, the claim could not be rejected because the demand was made for the first time in this year and the assessee had to provide for it only in this year. We allow the appeal in this regard'.
9. There is no reference of any decision of Deputy Commissioner (Appeals) in the order of Tribunal nor any argument appears to have been raised by the department that the demand of sales tax liability raised in 1983-84 has been quashed by Deputy Commissioner (Appeals). When neither that argument has been advanced regarding quashing of the demand of sales tax in the assessment year 1983-84 nor there is any finding of the Tribunal that demand of sales tax has been quashed in this very assessment year i.e., 1983-84, the claim of the assessee was allowed only on the ground that though the demand of sales tax of Rs. 1,27,058 pertains to the assessment year 1975-76 but when the demand has been raised in the year 1983-84, it should be allowed in 1983-84. It is clear from the order of Tribunal that quashing of demand in question in 1983-84 does not figure in impugned order of Tribunal.
10. After order of Tribunal in appeal, one miscellaneous application has been filed by department, in miscellaneous application the department has again brought to the notice of the Tribunal the relevant facts but in that year also the Tribunal has observed that if the demand is subsequently cancelled by the Sales Tax Department in the subsequent years, that amount can be taxed under section 41(1) of the Act, 1961.
11. We are not concerned what happened in the subsequent years. The fact remains that demand of Rs. 1,27,058 though pertains to the assessment year 1975-76 but raised in the year 1983-84 and there is no reference in the order of the Tribunal regarding quashing of this demand by the Deputy Commissioner (Appeals) in the year 1983-84. We cannot go into the question which does not arise from order of Tribunal. The limited scope of this court is to consider the fact which does arise out of impugned order of the Tribunal.
12. In the facts and circumstances of this case, we find no infirmity in the order of the Tribunal so far allowability of Rs. 1,27,058 is concerned in assessment year 1983-84. If the demand in question has been quashed in the year 1983-84, department can take steps in accordance with law.
13. In the result, we answer the question in affirmative i.e., in favour of the assessee and against the revenue.
14. The reference so made stands disposed of accordingly.