Somnath Iyer, J.
1. The assessee is a registered firm in Hubli, one of whose activities, according to the finding of the income-tax authorities, was a purchase gold. The assessment year was 1959-60. On January 30, 1958, when an employee of the assessee took five bars of gold weighing 611 total to the National Refinery in Bombay for being made into bars, the Customs authorities seized it. On October 10, 1959, an order of confiscation was made under the Sea Customs Act.
2. In the assessment relating to the assessement year 1959-60 the Income-tax Officer added a sum of Rs. 73,320 to the total income of the assessee as income from undisclosed sources. The amount added was the value of the gold seized on January 30, 1958. But the Appellate Assistant Commissioner deleted that addition in the appeal preferred by the assessee on two grounds. The first was that the gold did not belong to the assessee and the second was that its confiscation resulted in also which should be set off against the income from undisclosed sources, if any.
3. But in the appeal preferred by the Income-tax Officer, the Income-tax Appellate Tribunal reversed the finding of the Appellate Assistant Commissioner and substituted a finding that the gold was acquired by the assessee out of its income from undisclosed sources. But it directed the addition of a smaller sum of money amounting to Rs. 48,880 which was the value of the gold calculated at a rate lower than the market rate. The assessee then made an application under section 66(1) to the Tribunal in which he wanted six questions to be referred to this court. The Tribunal dismissed that application. But, on an order made by this court under section 66(2), the Tribunal has now referred to this court two questions of law which read :
'(1) Whether there was any material before the Tribunal to come to the conclusion that the gold which was the subject-matter in this case was that of the firm and
(2) Whether the value of the gold which had been confiscated could be included in computing the total income of the assessee for the relevant assessment year ?'
4. According to the system of accounting adopted by the assessee, its accounting year began on November 10, 1957, and ended on November 11, 1958. The finding of the Appellate Tribunal was the assessee acquired the gold out of the income from undisclosed sources. It is undisputed that if the question of law really arose out of the order of the Tribunal, our decision on that question of law should be that the income from undisclosed sources was the income of the assessee for the assessment year 1958-59, and not of the assessment year 1959-60.
5. Section 2(11) of the Indian Income-tax Act, 1922, which is the relevant statutory provision applicable to this case, makes it clear that the previous year with respect to income from undisclosed sources is the relevant financial year and not the year of accounting of the assessee if it is not the financial year. That that is so was not disputed by Mr. Rajasekhara Murthy appearing for the department, and the elucidation made by the Supreme Court in Civil Appeals Nos. 863 and 864 of 1966 was that the only possible way in which an income from an undisclosed source could be assessed is to make the assessment on the basis that the previous year of such income is the ordinary financial year.
6. The ordinary financial year which is recant to the assessment year 1959-60 is the year which commenced on April 1,1958, and ended on March 31, 1959. but since the finding of the Appellate Tribunal was that the gold had been acpuired by the assessee without income from undisclosed sources. It becomes indisputable, on the finding recorded by the Trbunal, that that income from undisclosed sources had been received by the assessee at some point of time antecedent to January 30, 1958.
7. The clear meaning of the finding recorded by the Tribunal is that on that date the assessee had become the owner of the gold having paid its price out of the income from undisclosed sources. But January 30, 1958, did not fall within the ordinary financial year relevant to the assessment year 1959-60, although it fell within the accounting year of the assessee, according maintained by him. So, according to the declaration of the law nade by the Supreme Court, that income which was included by the Tribunal in the total income of the assesses relevant to tje assessment year 1959-60, could not have been so included since its inclusion was possible only with respect to the assessment year 1958-59.
8. What we have said so far would, if nothing else could be said about it, produce the answer to the second question referred to us, in favour of the assessee. But Mr. Rajasekhara Muthy appearing for the department contended that the second question which is before us did not been either referred by this court under section 66 (2). It was maintained that the argument that the income could not have been included in the income relevant to the assessment year 1959-60 was not raised before the Tribunal when it heard the appeal, and so, was not decided by it, and that therefore the question, though a question of law, did not arise out of the order of the Tribunal.
9. We do not agree. The second question before us does not raise any new question of law. It raises only a new aspect of the question of law which was before the Tribunal. What the Tribunal had to decide was whether the income which was added by the Income-tax Officer was the previous year relevant to the assessment year 1959-60. The inclusion of the price paid by the assessee for the acquisition of gold in its total income relatable to the assessment year 1959-60 was not possible unless the Tribunal came to the conclusion that that sum of money was the assessee's income, and that it was received by the assessee during that period.
10. The Tribunal's finding that the assessee purchased the gold out of its income from undisclosed sources, clearly means that that income had been received before January 30, 1958, when it was seized. It is equally clear that its decision was that that income could be added to the income of the previous year relating to the assessment year 1959-60. Else it could not have taxed it in that way. If that decision was wrong, as it clearly was, whether it knew it was so or not, its sustainability is a question which plainly arises out of its order.
11. So the question which is before us is not a new question which did not arise out of the order of the Tribunal; it was a question which was certainly before the Tribunal and it could not be said that it was not decided by the Tribunal against the assessee. It is right to say that, in the decision of the Tribunal that the income could be included in the total income of the assessee as directed by it, is necessarily implicit the decision that it could be added to the income of the relevant previous year.
12. There are at least three decisions of the Supreme Court which negative the contention advanced on behalf of the department that the second question is not properly before us. The first is Commissioner of Income-tax v. Scindia Steam Navigation Co. Ltd., in which the enunciation made is that there is a distinction between a new question of law and a new aspect of the question of law which was before the Tribunal, and that whereas a new question of law which does not arise out of the order made by the Tribunal cannot be referred to the High Court, a question which presents a new aspect of the question of law which was before the Tribunal could be so referred. The assessment year in that case was 1946-47 and the question was whether a sum of money which was the difference between the original cost and the written down value of the assessee's ship which was lost as a result of enemy action could when the assessee received from Government compensation for such loss be properly included in the income of the assessee. Such inclusion was possible only under the fourth proviso to section 10(2) (vii) of the Income tax Act. But that proviso was not in the Act on April 1, 1946, but came into effect only on May 4, 1946, and was not retrospective. It was indisputable that except under that new proviso that sum of money which was included in the assessee's income could not have been included. But that contention was not raised before the Appellate Tribunal nor was any reference made to it in the question referred by the Tribunal to the High Court. But the High Court of Bombay allowed that contention to be raised for the first time on the hypothesis that that question of law was implicit in the question of law which arose from the Tribunal's order. The Supreme Court in the appeal preferred by the Commissioner of Income-tax repelled the argument that the question of law was wrongly allowed to be raised by the High Court for the first time in the reference before it, and, in that context the Supreme Court said this :
'But the appellant contends that while before the income-tax authorities the respondents disputed their liability on the ground that the amount in question had been received in the year previous to the year of account, the contention urged by them before the court was that even on the footing that the income had been received in the year of account, the proviso to section 10(2) (vii) had no application, and that it was a new question which they were not entitled to raise. We do not agree with this contention. Section 66(1) speaks of a question of law that arises out of the order of the Tribunal. Now a question of law might be a simple one, having its impact at one point, or it may be a complex one, trenching over an area with approaches leading to different points therein. Such a question might involve more than one aspect, requiring to be tackled form different standpoints. All that section 66(1) requires is that the question of law which is referred to the court for decision and which the court is to decide must be the question which was in issue before the Tribunal. Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal. It will be an over-refinement of the position to hold that each aspect of a question is itself a distinct question for the purpose of section 66(1) of the Act.'
13. This enunciation was reiterated in Bhanji Bhagawandas v. Commissioner of Income-tax. The question referred by the Tribunal in that case to the High Court was whether the assessment was saved from the bar of limitation under the second proviso to section 34(3) of the Income-tax Act. For the first time the department advanced a new argument before the Supreme Court that in answering that question the effect of section 2 of the Income-tax (Amendment) Act, 1959, should be taken into consideration and that that aspect was within the framework of the question referred to the High Court. The argument resting on the amendment on which the department depended was not raised before the Tribunal or before the High Court for the reason that it had not yet commenced to operate. But on the basis of the enunciation made in the Scindia Steam Navigation Company's case the Supreme Court allowed that contention to be raised, pointing out that the argument advanced on behalf of the department did not raise any new question which was not before the Tribunal, but presented a new aspect of a question which was in truth before the Tribunal and had been decided by it.
14. The third decision of the Supreme Court which is on all fours with the case before us is Raja Sharda Narain Singh v. Commissioner of Income-tax. That was a case in which the assessee's father was a big zamindar and after his death in the year 1944 it was noticed by the Income-tax Officer that the assessee had been credited with a sum of two lakhs of rupees in the estate treasury of the assessee. The Income-tax Officer who was not satisfied with the explanation furnished by the assessee included that sum of money in the total income, and, although the Appellate Assistant Commissioner excluded that sum of money, the Appellate Tribunal restored the order of the Income-tax Officer. The assessment year was 1949-50 and the accounting year of the assessee commenced on September 28, 1947, and extended up to September 30, 1948. But since the deposit had been made on November 3, 1947, and the Tribunal had recorded a finding that what was added to the assessee's income was income from undisclosed sources, the assessee sought a reference under section 66(1) of four question one of which was whether that sum of money was income relatable to the relevant assessment year. The Tribunal rejected the application and the High Court, to which an application was made under section 66(2) for a reference of two among those four questions including the one to which we have referred, declined to direct the reference.
15. From that order of the High Court the assessee preferred an appeal to the Supreme Court which succeeded, and the Supreme Court directed the Tribunal to refer to the High Court the question whether the sum of money included in the assessment as income form undisclosed sources was not assessable in the assessement year 1949-50 but was assessable only in the assessment year 1948-49 which was relevant to the financial year commencing on April 1, 1947. The question of law which the Tribunal was directed to refer had not been argued before the Tribunal in that form and there was no discussion of that question in its order. But the Supreme Court explained that the question raised on behalf of the assessee was a serious question which arose out of the order of the Tribunal.
16. It will be seen from the discussion in the judgment of the Supreme Court that in its opinion the question before the Tribunal was whether the income could be held to be the income of the relevant accounting year, and it is clear that was also the question which was before the Appellate Tribunal in the case before us. While referring to that question the Supreme Court said this :
'This question was a wide question and included the aspect which is now being put in the forefront. It is true that the cases relied upon by Mr. Desai were not mentioned by the Appellate Tribunal. But we are unable to agree with the learned counsel for the respondent that an aspect of a question cannot be the subject-matter of a reference, if that aspect is not considered by the Appellate Tribunal.'
17. There is great similarity between the case before the Supreme Court and the one before us. In the same way in which the Tribunal in that case was of the opinion that the sum of to lakhs of rupees had to be added to the income of the assessee in respect of the assessment year 1949-50, the Tribunal in the case before us was of the opinion that the income of the assessee from undisclosed sources should be added to the income pertaining to the assessment year 1959-60. Neither in the one case nor in the other was an argument advanced before the Tribunal that that income was the income of the relevant financial year, and so could not form part of the income concerning the assessment year. But the question whether the inclusion made by the Tribunal was right or not was not as explained a new question but was only an aspect of the question which actually was before the Tribunal although it had not been raised before it.
18. We are, therefore, of the opinion that the second question before us did arise out of the order made by the Tribunal and our answer to that question is in favour of the assessee.
19. So, Mr. Rajasekhara Murthy and Mr. Srinivasan submit that our answer to the second question dispenses with the necessity to answer the first, and we, therefore, do not answer it. Our answer to the second question is that the value of the gold which has been confiscated could not be included in the computation of the total income of the assessee in respect of the assessment year 1959-60. No costs.