Harnam Singh, J.
1. This order disposes of Income-tax Cases Nos. 18 to 22 of 1951.
2. By 66-Reference Applications Nos. 1141 to 1145 of 1950-51, the Punjab Distilling Industries Ltd., Khasa, hereinafter referred to as the assessee, applied to the Income-tax Appellate Tribunal under Section 66, Income-tax Act, 1922, hereinafter referred to as the Act, requiring the Appellate Tribunal to state and to refer the cases to the High Court on two questions of law. In the several applications the questions of law arising out of the orders of the Tribunal were stated to be as under :
(1) Whether, on the facts and circumstances of the case, the security deposit received for the purpose of ensuring the return of empty bottles was income assessable under Section 10, Income-tax Act?
(2) Whether, on the facts and circumstances of the case, cash lying with the assessee in the form of security deposit, could, on the return of bottles, be treated as stock-in-trade without the price o bottles being separately paid under the buy-back system?
(3) In rejecting the applications the Tribunal found that out of the orders of the Tribunal in the several cases no question of law arose.
4. In these circumstances the assessee applies under Section 66(2) of the Act for directions to the Tribunal to state the case in each case and to refer it for decision to the High Court. In the applications made in this Court it is said that in addition to the two questions set out above questions of law specified hereunder also arise from the orders of the Tribunal :
(3) Whether, on the facts of the case, the sum of Rs. 66250/- represents in law security deposit or sale-proceeds?
(4) Whether, there is evidence for the finding that the nature of this sum is that of sale-proceeds and not that of security deposit?
5. Considering that the points arising in the cases can be decided without referring to a long chain of facts which are narrated in the order passed by the Tribunal on 28th May 1951, I do not think it necessary to burden. this order with the recapitulation of those facts.
6. Mr. Sarv Mittar Sikri appearing for theDepartment argues that it is not open to theassesses to apply to this Court for directionsto the Tribunal to state, the case on the addi- tional questions stated in the preceding para- graph.
7. Mr. Amar Nath Grover urges that as atthe time of hearing of the Reference Applications the Tribunal was asked to make the reference on questions 3 and 4 set out above, the assessee can maintain applications under Section 66 (2) of the Act for statement of the cases inter alia on questions 3 and 4. I do not accept the view so presented for the reasons appearinghereunder. Rule 12 of the Appellate Tribunal Rules, 1946, reads :'The appellant shall not, except by leave ofthe Tribunal, urge or be heard in supportof any ground not set forth in the memorandum of appeal; but the Tribunal, in deciding the appeal shall not be confined tothe grounds set : forth in the memorandumof appeal or taken by leave of the Tribunalunder this rule.
Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground.'
8. Rule 36 of the Rules provides that Rr. 7, 8, 13, 20, 21, 22, 23, 26 and 33 shall apply, 'mutatis mutandis', to an application under Sub-section (1) of Section 66. Clearly, Rule 12 has not been made applicable to applications under Section 66(1) of the Act. That being so, the Tribunal was right in not allowing the assessee to urge or be heard in support of questions 3 and 4. That being the law, the assessee cannot be permitted to urge in this Court the questions of law, if any, contained in questions 3 and 4.
9. Mr. Sary Mittar Sikri then argues that question 2 which was before the Tribunal and is before this Court does not arise from the orders passed by the Tribunal in the five cases. On a perusal of the orders passed by the Tribunal I agree that the question of law contained in question 2 has nowhere been decided by the Tribunal. Clearly, question 2 does not arise from the orders passed by the Tribunal.
10. That question 1 raises a question of law is not open to serious challenge. In -- 'Withers (Inspector of Taxes) v. Nethersole', (1948) 16 ITR (Suppl) 92 Lord Viscount Simon said :
'The question of law is whether the facts set out in the case, and the documents annexed to it, establish that the amount paid to the respondent under the agreement of June 27, 1939, is 'annual profits or gains', falling under Case VI of Schedule D.' In the present case the question is whether the security deposit received for the purpose of ensuring the return of empty bottles is assessable income under Section 10 or the Act. In my opinion the judgment of the House of Lords in (1948) 16 ITR (Suppl) 92 governs the case.
11. For the foregoing reasons, I am not satisfied with the correctness of the decision of the Tribunal so far as question 1 is concerned. That being so, I would require the Tribunal to state the case in the several matters and refer for decision to this Court question 1 set out above. Costs to be costs in the cause.
12. I agree.