Oza, Actg. C.J.
1. This is a reference made by the Income-tax Appellate Tribunal for answering the following question :
'Whether, under the facts and circumstances of the case, the Tribunal was justified in law in sending back the case to the Income-tax Officer ?'
2. The facts as stated in the reference are that the assessee's three coal mines at Barkuhi East, Barkuhi West and Ghorawari and Hirdagarh were taken over by the Government under the Coal Mines Nationalisation Act, 1973. A compensation of Rs. 5,67,000 was determined payable by the Commissioner of Claims appointed under Section 17 of the said Act. It appeared that in addition to some assets of the assessee, the assets of the contractor employed by the assessee for exploitation of the mines, were lying in the mines. Under Section 26, Sub-section (5), of the Coal Mines Nationalisation Act, 1973, where any machinery or equipment or other property in the coal mine had vested in the Central Government or a Government company under the Act, but, such machinery, equipment or other property did not belong to the owner of such coal mine, the amount of compensation would, on a reference made to it by the Commissioner of Claims, be apportioned by the District Court between the owner of such coal mineand the owner of such machinery, equipment or other property, having due regard to the value of such machinery, equipment or other property an the date of take-over.
3. The ITO, however, proceeded to determine the profits under Section 41(2) of the I.T. Act at Rs. 36,228 as if the entire amount of Rs. 5,67,000 was receivable by the assessee who was the owner of the mines. The Commissioner of Income-tax (Appeals) held that the ITO had committed a basic error in assuming that the entire compensation would be receivable by the assessee itself. Relying on the Supreme Court's decision in the case of Calcutta Co. Ltd. v. CIT : 37ITR1(SC) , the Commissioner of Income-tax (Appeals) held that since the liability to the contractor whose machinery was lying on the coal mines was a definite liability and since the assessee had indicated the quantum of such liability on a rational and scientific basis, and if that position was accepted, the assessee had suffered a loss under Section 32(1)(iii) of the I.T. Act and not earned any profit under Section 41(2) as determined by the ITO. He, therefore, vacated the addition of Rs. 36,228 made by the ITO under Section 41(2) and allowed the loss of Rs. 2,65,772 under Section 32(1)(iii). On appeal against this order of the Commissioner of Income-tax (Appeals), the Tribunal held that the Commissioner of Claims has to make a reference to the District Court under Section 26(5) of the Coal Mines Nationalisation Act, 1973, and as the court has not yet made an award of apportionment of compensation between the assessee and the contractor, the fact whether the assessee would be entitled to terminal loss under Section 32(1)(iii) or assessable to profit under Section 41(2) would become clear only after the District Court passes the award apportioning the compensation between the assessee and the contractor. The Tribunal, therefore, set aside the order of the Appellate Commissioner and also of the ITO and sent the case back to the ITO to pass an order after the award of the District Court is obtained on the question of apportionment of compensation. At the request of the assessee the Tribunal has made this reference for answering the question quoted above.
4. Learned counsel for the assessee contended that the Commissioner of Income-tax (Appeals), following the decision of the Supreme Court in Calcutta Co. Ltd. v. CIT : 37ITR1(SC) , came to the conclusion that as the question of apportionment was a definite affair and the assessee has given the value of the property of the contractor lying on the coal mines, he estimated the apportionment and came to the conclusion that the ITO was not right in adding Rs. 36,228 as profit under Section 41(2) but he allowed Rs. 2,65,772 as a loss under Section 32(1)(iii) of the I.T. Act. It was contended by the learned counsel that as the estimates and the value of the property left by the contractor are ascertainable and have been stated by theassessee in a scientific manner, there was nothing which remained in doubt and, therefore, the Tribunal was not right in setting aside the order of the Commissioner of Income-tax (Appeals) and sending the case for its disposal after the District Court's award. It was contended that under Section 153 the question of limitation will arise and the matter may take a long time for the District Court to dispose of the apportionment of compensation and pass an award and, therefore, the assessment cannot be finalised within the time as contemplated under Section 153. Learned counsel, apart from the decision in Calcutta Co.'s case, placed reliance on Maharani Kanak Kumari Sahiba v. CIT : 28ITR462(Patna) and United Commercial Bank Ltd. v. CIT : 137ITR434(Cal) . Learned counsel for the Revenue, on the other hand, contended that the Tribunal's order in no way disposes of the matter finally. It was contended that under Section 26(5) of the Coal Mines Nationalisation Act, jurisdiction is conferred on the District Court for apportionment of the compensation and it is only after the award of the District Court that it could finally be determined as to what amount of compensation will be available to the assessee and, therefore, on that basis it could be worked out as to whether there will be profit taxable under Section 41(2) or loss under Section 32(1)(iii) of the I.T. Act. It was contended that in view of the language of Section 26(5) of the Coal Mines Nationalisation Act, it could not be disputed that the matter will be final only when the District Court disposes of the reference and gives its award. It was contended that even the award may be more beneficial to the assessee as the quantum of compensation available to the assessee may even be reduced. It was also frankly admitted by the learned counsel for the assessee that ultimately the award may be more beneficial to the assessee or may not be but he contended that when the facts are ascertainable and certain, it is not necessary to keep the matter pending. As regards the question of limitation, learned counsel for the Revenue contended that this question was not before the Tribunal and was not raised and, therefore, that does not form part of the question referred to this court and, therefore, it was not necessary to be considered, whereas according to the learned counsel for the assessee when the matter is sent back to the ITO for consideration of assessment after the award of the District Court is received, it is inherent that question of limitation under Section 153 may arise. It is not in dispute that the compensation fixed for this coal mine will have to be apportioned in view of the property and assets of the contractor lying on the coal mine apart from the property and assets of the owner of the coal mine and it is also not disputed that even before this apportionment if there are other claims, the Commissioner of Claims will determine them and it is only after payment of all other claims what remains will be apportioned between the owner and the contractor in thelight of the property and assets which the contractor may have lost on the coal mines. The only controversy is that according to the learned counsel for the assessee these are matters which could be ascertained by taking the price of articles lying on the coal mines and applying a scientific basis for assessment of it. It was contended that the contractor's claim for loss was accepted by the Tribunal as it was before a different Tribunal whereas the estimate of the assessee, the owner of the coal mines, based on the same basis has not been accepted by the Tribunal where this case was heard.
5. Calcutta Co. Ltd. v. CIT : 37ITR1(SC) , on which reliance was placed by the learned Commissioner (Appeals), lays down that the difficulty in the estimation thereof did not convert the accrued liability into a conditional one, because it was always open to the income-tax authorities concerned to arrive at a proper estimate thereof having regard to all the circumstances of the case. What was held in this case was that where the facts are ascertainable they could be ascertained and it was contended that the assessee had given the estimates on the basis of the price of the property estimated on scientific basis. It is clear that Calcutta Co.'s case was not a case of the kind where the question of apportionment of the quantum of compensation was subject to the jurisdiction of a competent court. In the present case it could not be disputed that the Commissioner of Claims has to ascertain various claims and, after giving credit for these claims, find out the balance of compensation which is payable and out of this, apportion the compensation between the owner and the contractor. The Commissioner has to make a reference to the District Court and under Section 26(5)ill finally settle as to what will be available to an owner and what will be available to a contractor. In view of the language of Section 26(5), it appears that the matter should be kept open till the order is passed by the District Court apportioning the compensation as that will be the final order deciding as to what amount of compensation will be payable to the assessee and, therefore, the Tribunal felt that it is only then that it could be found out whether there will be profit available for taxation under Section 41(2) or loss to be considered under Section 32(1)(iii) of the I.T. Act. It is, therefore, not a case where the ITO's assessment would be final until the District Court passes its award and it is in view of this matter it appears that the Tribunal reopened the case and sent it back to the ITO to decide after the award of the District Court. It is, no doubt, true that whether the question of limitation will cause any impediment or not, does not appear to be a question raised in this order of reference nor is that question referred to us and in that view of the matter it is not necessary for us to go into that question. As the Tribunal has not finally disposed of thematter but only remanded it for decision after the matter is finally settled by the District Court about apportionment of compensation, in our opinion, no question of law arises which needs a reference. In this view of the matter, therefore, our answer to the question referred to us is in the affirmative saying that the Tribunal was justified in law in sending the case back to the ITO.
6. The reference is answered accordingly. In the circumstances, parties are directed to bear their own costs.