M.M. Punchhi, J.
1. This is a petition under Section 256(2) of the I.T. Act, 1961, at the instance of the Commissioner of Income-tax, Amritsar, seeking mandamus from this court requiring the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, to refer the following questions of law, said to arise in its decision dated November 14, 1975, in Income-tax Appeal No. 431 (Asr) of 1974-75:
(i) Whether, on the facts and in the circumstances of the case, and after having held that the import licence granted to the assessee was not transferable under the Import Trade Policy, the Tribunal is right in law in holding that the profit on sale of a part of the licence accrued to the assessee during the previous year relevant to the assessment year 1969-70 and not in the assessment year 1970-71 ?
(ii) Whether the Tribunal is right in law ill concluding that the entire goods covered by the import licence worth Rs. 1,52,000 were received and sold during the previous year ending August 31, 1968, on the basis of a receipt of single consignment for a sum of Rs. 37,262 on August 30, 1968, and, therefore, the entire sum of Rs. 1,18, 560 was assessable in the assessment year 1969-70 and not in the assessment year 1970-71 ?
(iii) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the profit of Rs. 1,18,560 is assessable in the assessment year 1969-70 and not 1970-71
2. The assessee is a registered firm comprising of seven partners, three of whom are females each holding one-fourth share in the firm. The remaining four male partners share amongst themselves the remaining one-fourth share. The assessee carried on business in sale of imported wool tops. During the accounting period ending August 31, 1968, which was relevant to the assessment year 1969-70, the assessee received an import licence of the value of Rs. 3,59,123. This was in respect of exports made in earlier years for a higher value. For the said assessment year 1969-70, the assessee disclosed an income of Rs. 1,18,560 on the premium earned for the transfer of rights, in part, in the import licence to the value of Rs. 1,52,000 in favour of Messrs M.J. Spinners, Amritsar. The rate of the premium was as high as 78 per cent. The remaining value of the import licence was retained by the assessee and goods were imported by it. The ITO included the profit of Rs. 1,18,560 as disclosed by the assessee in the assessment for the year 1969-70 on a protective basis, taking the view that the transfer of the licence of the value of Rs. 1,52,000 was a measure calculated to stagger the profits over two to three years and hence came to the conclusion that the profit of Rs. 1,18,560 was in fact assessable in the assessment for the year 1970-71.
3. It appears that Messrs M.J. Spinners too was a partnership concern, rather a sister concern of the assessee, in a sense. The partners in that firm were the respective husbands of the three female partners in the assessee-firm. Already suspicious on account of such relationship, the ITO during the course of assessment proceedings for the assessment year 1970-71 required the assessee to explain as to why the said profit of Rs. 1,18,560 be not added in the total income for the assessment year 1970-71. The basis for asking such an explanation from the assessee apparently was that the transferee-firm had in the assessment year 1970-71 effected imports on the basis of the transferred import licence. And since in his view the said licence had been acted upon in that assessment year, it could be taken to have been transferred in that year, especially when transfer of the import licence as such was not permissible under the Import Trade Policy, unless permission for the purpose had been sought from the concerned authorities. The assessee explained that it had utilised the import entitlement as permissible under the law. The ITO did not, however, accept the assessee's explanation and came to the conclusion that the assessee actually did not transfer the import replenishment licence to the transferee during the accounting period relevant to the assessment year 1969-70 but during the assessment year 1970-71. He, therefore, included the profit of Rs. 1,18,560 during the assessment year 1970-71. The assessee unsuccessfully appealed before the AAC. The Income-tax Tribunal, however, allowed the assessee's appeal on a factor which we notice in the very words of the Tribunal :
'We, however, find from the details brought to our notice that the first consignment for a sum of Rs. 37,262 was actually imported by Messrs M. J. Spinners on August 30, 1968, which falls during the accounting period relevant to the assessment year 1969-70 and not during the accounting period relevant to the assessment year 1970-71, as held by the AAC. We, therefore, do not accept the reasoning of the Appellate Assistant Commissioner in holding that the profit of Rs. 1,18,560 arose to the assessee in the assessment for the year 1970-71. After the appraisal of the entire evidence on the record, we are of the opinion that the profit of Rs. 1,18,560 is chargeable to tax during the assessment year 1969-70 and not during the assessment year 1970-71 which is under appeal.'
4. A cursory look at the questions posed by the Revenue shows that questions Nos. (i) and (ii), which are inextricably linked up, reveal no questions of law emerging therefrom. Whether the import licence was legally transferable or not under the Import Trade Policy is of no consequence when there is no dispute that income had accrued to the assessee, and that on such transfer, the transferee firm had, acting thereon, utilised the import licence, on the strength of which, it imported goods for a sum of Rs. 37,262 on August 30, 1968, a period which fell within the assessment year 1969-70. In other words, the import licence had been acted upon. The consistent finding of the officers otherwise was that the assessee employed the mercantile system for maintenance of accounts, and when it had claimed that it had received Rs. 1,18,560 as profit as on July 11, 1968, which stood supported by the conduct of the transferee-firm, no action arose for seeking reference on questions Nos. (i) and (ii). It is only on question No. (iii) that some stress could have been laid as to whether income accrued to the assessee or not as a matter of law, but not as a matter of fact. The Tribunal while rejecting the application of the Revenue under Section 256(1) of the Act, took the view that the finding recorded by it was a pure finding of fact and did not involve the interpretation of any legal principles. No such principles have been pointed out before us from which it could be said that the Tribunal was wrong in law in holding that the total profit of Rs. 1,18,560 was not assessable in the assessment year 1969-70. The Tribunal as a fact has found that since the said income accrued to the assessee in that assessment year, the question as such did not arise being a question of fact.
5. In this view of the matter, the prayer made herein by the Revenue has to be declined but without any order as to costs.