1. The Income-tax Appellate Tribunal, Indore Bench, Indore, has made this reference at the instance of the assessee under Section 256(1) of the I.T. Act, 1961, for the opinion of this court regarding the question of law referred to by them, which is reproduced below :
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee failed to discharge the initial onus to prove the loss which lay on him when the assessee had produced the certificate of the excise authorities which supported the assessee's claim for loss ?'
2. The facts giving rise to this petition as per the statement of the case may be stated, in brief, thus. The assessee is an individual. He derives income from liquor contracts and the share income from M/s. Kishorilal Ramlal. The assessee had taken liquor contracts for Rs. 2,06,000. In the year under consideration, he filed a return on February 25, 1977, declaring a loss of Rs. 500. The reasons for the loss was that the son of the assessee unnecessarily offered more money at the time of auction. It was also explained that the same contract was given by the Government in the next year for Rs. 1,76,000 only. The ITO was not satisfied with the explanation of the assessee. The ITO estimated sales at Rs. 5,15,000 and applied a gross profit rate at 7.5 per cent. Thus, the income was determined at Rs. 38,625. The income from the firm was worked out at Rs. 7,356. Thus, the total income was computed at Rs. 45,680.
3. The AAC, after considering the contention of the assessee and the evidence on record, estimated the income of the assessee at Rs. 28,000 as against Rs. 38,625 determined by the ITO and gave relief to the assessee on Rs. 10,625.
4. The Revenue appealed to the Tribunal on the ground that the AAC was wrong in granting relief of Rs. 10,625. The assessee's contention was that the AAC was not justified in estimating income at Rs. 28,000 from country liquor business, as, according to him, the loss claimed by the assessee should have been accepted. The Tribunal, after considering the facts and circumstances of the case, dismissed the appeal. Hence, this reference.
5. The learned counsel for the petitioner contended that though ordinarily this court cannot interfere in a reference on questions of fact, in this case so far as the petitioner is concerned he has discharged the initial burden of proof of having suffered loss in support of which he had filed the certificate issued by the Sub-inspector, Excise, Kannod, dated August 1, 1981 (Annexure ' D '), according to which it is clearly mentioned that in the year 1975-76, the petitioner who had taken country liquor contracts for different shops in different places had incurred a profit of Rs. 678.28 and a loss of 9,902.17. He, therefore, submitted that the respondents have not disputed the contents of this certificate by which the petitioner has prima facie discharged the burden of proof that he had sustained loss in the liquor contracts in that year. He, therefore, submitted that if the respondents wanted further proof in support of this certificate, they could certainly ask the petitioner to produce additional evidence in support of his contention. But so far as the initial onus to prove the loss is concerned, the certificate produced by him is the best evidence which he has tendered and thus he has discharged the initial onus to prove the loss, though he did not dispute that the burden to prove the loss did lay upon the petitioner. He, therefore, submitted that the question framed and referred to this court, as stated above, should be answered in favour of the assessee.
6. On the other hand, the learned counsel for the Revenue submitted that it was the duty of the petitioner to substantiate the loss said to have been incurred by him by producing the necessary account books. This submission of the learned counsel for the respondent is correct and if the respondent was not satisfied with the certificate produced by the petitioner, they could certainly ask him to produce additional evidence.
7. In these circumstances, as a matter of fact, in our opinion, it was not necessary for the Tribunal to make the reference. But the manner in which the question has been framed and referred to this court, no doubt, is a question of law which refers only to the initial onus of proof regarding the loss said to have been sustained by the petitioner for which he has produced the certificate of the excise official which is the primary and best evidence, the contents of which are not disputed by the respondent nor is it suggested that the said certificate cannot be taken into consideration or relied upon in finalising the assessment of the petitioner. Thus the question as framed and referred has to be answered in favour of the assessee and against the Revenue.
8. Our answer, therefore, to the said question is :
'That, on the facts and in the circumstances of the case, the Tribunal was not justified in law in holding that the assessee failed to discharge the initial onus to prove the loss which lay on him when the assessee had produced the certificate of the excise authorities which supported the assessee's claim for loss.'
9.The reference is answered accordingly with no order as to costs.