Independent firm finding on evidence not perverse, so reference interference was unwarranted in favour of the assessee.

Whether one concern was merely an extension of another firm was treated as a question of fact. The Tribunal's finding that the second concern was an independent and genuine firm, supported by separate capital contributions, separate books of account and separate registrations under tax laws, was not shown to be perverse. As the record disclosed no material making that finding impossible or legally unsustainable, interference was unwarranted in reference jurisdiction. The issue was answered in favour of the assessee and against the Revenue.

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Issues: Whether the Tribunal was right in holding that the two concerns could not in law be treated as one firm for assessment purposes.

Analysis: The determination whether one firm was merely an extension of the other was treated as a question of fact. The Tribunal's finding, based on appreciation of the evidence, was that one concern was an independent firm and not an extension of the assessee-firm. The record showed separate capital contribution by all partners, separate books of account, separate registration granted by the sales tax and central tax authorities, and separate registration under the Income-tax Act, 1961. On these facts, the conclusion that the concern was genuine and not a mere benami or extension of the assessee-firm could not be characterized as perverse. Since no material showed the finding to be impossible or perverse, interference was unwarranted.

Conclusion: The question was answered in the affirmative, in favour of the assessee and against the Revenue.

Ratio Decidendi: A finding that a firm is independent and not an extension of another firm, if based on evidence and not shown to be perverse, is a finding of fact not open to interference in reference jurisdiction.

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