COLLISTER AND BAJPAI, JJ. - This is a reference under Section 66(2) of the Indian Income-tax Act from the learned Commissioner of Income-tax, central and United Provinces. The assessee in the present case is Lala Tribeni am of Bridgemanganj, and the assessment years are 1931-32 and 1932-33. The question of law that has been referred to us for our opinion is as follows :-
'In the circumstances of this case was there no admissible evidence for the income-tax authorities to consider the deed of dissolution, dated the 26th of April 1933, as a fabrication for income-tax purpose?
It is not denied that the assessee was at one time a partner in his business with Balram Das and Ramadas and the assessment for the two years in question has been made on the basis of this partnership. The assessees case, however, was that there had been a dissolution between the partners some time in October 1932 as evidenced by the document dated the 26th of April, 1933. This document was produced before the Income-tax Officer on the 28th of April 1933. The reason why the assessee alleged a dissolution of partnership was that he wanted his personal loss to be set off against the profits of the partnership. The Income-tax Officer was of the opinion that there was no dissolution of partnership in fact and the document, dated the 26th of April 1933, was brought into existence for the purposes of the assessment and was never intended to be acted upon. The learned Assistant Commissioner of Income-tax agreed with the view of the Income-tax Officer. The Commissioner refused to give any relief under Section 33 of the Indian Income-tax Act but has referred the question of law mentioned before under Section 66(2) of the Act for our opinion.
There can be no doubt that the question of law should arise out of the appellate order of the Assistant Commissioner under Section 66(2) of the Act and the findings of fact arrived at by the Assistant Commissioner cannot be challenged, and thus the only question that has been referred to us is whether there was no admissible evidence for the finding that the deed of dissolution was a fabrication for income-tax purposes. The assistant Commissioner went in to the matter very carefully. He emphasised the fact that although the dissolution was said to have taken place some time in October 1932, no document was drawn up till the 26th of April 1933 and that the document was produced on the 28th of April 1933 when the assessee appeared in response to a notice under Section 23(2) and when the assessment order was about to be passed by the Income-tax Officer. He then looked into the deed and saw that it contained a number of contradictory and false statements. He scrutinised the account books and they showed that even after the alleged date of dissolution the various partners were receiving profits from the business. He agreed with the Income-tax Officer that no dissolution had taken place and that the document dated the 26th of April 1933 was executed merely with the object of supporting the false plea of dissolution of partnership in income-tax proceedings but was never intended to be acted upon and that the light of attending circumstances and the independent evidence of account books demonstrated that the view of the Income-tax Officer was correct. The evidence on which the Income-tax authorities relied was the inaccurate and contradictory statements contained in the document itself and the account books. Under these circumstances it is not possible to say that there was no admissible evidence for arriving at the finding that the deed of dissolution was a fabrication for Income-tax purposes. Let a copy of our judgment be sent to the Commissioner of Income-tax under the seal of the Court and the signature of the Registrar. The assessee must pay the costs of this reference. Counsel for the Department is entitled to a fee of Rs. 100. He will file his certificate within six weeks.
Reference answered accordingly.