COMMISSIONER OF INCOME TAX vs NAVAJYOTHI AGENCIES.

K. S. PARIPOORNAN, J. :

At the instance of the Revenue, the Tribunal has referred the following three questions of law, for the decision of this Court :

"(1) Whether, on the facts and in the circumstances of the case,

(i) the CIT(A) is justified in interfering with and reducing the additional made by the ITO ?

(ii) the addition by the ITO is justified in law and facts ?

(iii) should not the Tribunal depending upon the decision of the High Court in the connected case decide the case on merits ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal right and had relevant materials in deleting the addition sustained by the CIT(A) ?

(3) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and in fact in holding that the facts of this case are identical to the facts of the case in the case of M/s. Nirmala Liquors and deciding the case following the "ratio" in that case and is not the decision, approach and reliance on so called ratio unreasonable, perverse and illogical ?"

The respondent, a firm, is an assessee to Income Tax. We are concerned with the asst. yr. 1979-80. The respondent-firm was assessed for the asst. yr. 1979-80, year ending 31st March, 1979, by order dt. 14th September, 1982. In the appeal filed by the assessee, the CIT (A) gave partial relief. The order of the CIT (A) is dt. 30th July, 1983 and rendered in IT 21/ALY/CIT/82-83. The assessee as well as the Revenue filed second appeals from the aforesaid order dt. 30th July, 1983. The appeal filed by the assessee is ITA No. 716 (Coch)/1983 and the appeal filed by the Revenue is ITA No. 782(Coch)/1983. In the appeal filed by the assessee, the Revenue has filed a Cross Objection No. 4(Coch)/1984. The above two appeals and the Cross Objection were disposed of by a common order by the Tribunal. The order is dt. 11th August, 1986. The question of law, formulated hereinabove, have been referred at the instance of the Revenue as arising out of the common order aforesaid dt. 11th August, 1986.

We heard counsel for the Revenue, Mr. P. K. R. Menon. The assessee was not represented before us. The assessee is a contractor doing business in arrack and toddy. The Tribunal, in its common order dt. 11th August, 1986, held that the facts of this case are identical to the facts of the case decided by the Tribunal in ITA No. 717(Coch) /83 in the case of M/s. Nirmala Liquors, Thodupuzha and following the ratio laid down in the aforesaid decision the Tribunal adopted the income of the assessee from arrack business at Rs. 2,40,790. It was held that the profit shown by the assessee from arrack business is quite reasonable and no addition is called for. Counsel for the Revenue brought to our notice that the earlier decision of a the Tribunal in M/s. Nirmala Liquor case came up before this Court in ITR No. 229 of 1987 and this Court disagreed with the decision of the Tribunal and held that the Tribunal failed to decide the matter in accordance with law. It was further held that the Tribunal committed a procedural illegality or impropriety in file and determine the question afresh, in arriving at the conclusion and so this Court directed the Tribunal to restore the appeal to file and determine the question afresh, in accordance with law and in the light of the observations contained in the judgments. The said case is reported as Commissioner of Income Tax Vs. Nirmal Liquors, , judgment dt. 26th November, 1990. Since in the common order passed by the Tribunal dt. 11th August, 1986 the Tribunal has only adopted the decision rendered by it in M/s. Nirmala Liquors case (supra), we have no other alternative except to decline to answer the questions referred to this Court and at the same time, direct the Tribunal to restore the appeals and Cross Objection to file and decide the matter afresh, in accordance with law and in the light of the decision of this Court in ITR No. 229 of 1987 - reported in Commissioner of Income Tax Vs. Nirmal Liquors, . The Tribunal shall decide the appeals and the Cross Objection afresh, as expeditiously as possible.

The References are disposed of as above.