Supplementary statement of case must rest on existing record; fresh evidence cannot be added for answering a tax reference.

A supplementary statement of case under section 66(4) of the Indian Income-tax Act, 1922 must be confined to material already on the record. The Tribunal cannot be directed to collect fresh evidence for inclusion in that statement, and the High Court cannot rely on such additional material when answering the reference. Where the supplementary statement does not clearly separate existing record material from newly obtained evidence, it cannot properly form the basis of the Court's answer. The operative point is that the reference procedure does not permit expansion of the record through additional evidence at the supplementary statement stage.

---

---

Issues: Whether, in calling for a supplementary statement of case under the Indian Income-tax Act, 1922, the High Court could direct the Tribunal to collect additional evidence and rely on such material while answering the reference.

Analysis: A supplementary statement of case under section 66(4) had to be confined to material already on the record and could not be expanded by directing the Tribunal to collect fresh evidence. Since the supplementary statement in this matter was not clearly separable between existing material and additional evidence, the High Court could not properly act upon it while deciding the reference.

Conclusion: The direction permitting the Tribunal to record additional evidence was impermissible, and the High Court's answer based on the supplementary statement could not stand.

Ratio Decidendi: A supplementary statement of case under section 66(4) of the Indian Income-tax Act, 1922 must be founded only on material already on the record, and the Tribunal cannot be directed to collect additional evidence for that purpose.

---