Certificate of fitness for appeal must disclose the question of law; a bare recital is insufficient.

A certificate under section 66A(2) of the Indian Income-tax Act, 1922 is valid only if it expressly discloses the question of law and the ground on which the case is certified as fit for appeal; a bare statement of fitness is insufficient, so the appeal is incompetent where the certificate is defective. On the valuation issue, the dispute turned on factual findings about opening stock and did not raise any question of law, so the reference could not be sustained. The appeal could not be entertained, leaving the assessment undisturbed.

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Issues: (i) whether a certificate under section 66A(2) of the Indian Income-tax Act, 1922 was valid when it did not disclose the question of law or the ground on which the case was certified as fit for appeal; (ii) whether the stock-valuation dispute gave rise to any question of law so as to sustain the appeal.

Issue (i): whether a certificate under section 66A(2) of the Indian Income-tax Act, 1922 was valid when it did not disclose the question of law or the ground on which the case was certified as fit for appeal.

Analysis: The right of appeal under section 66A(2) arises only where the High Court certifies a case to be fit for appeal on the basis that a question of great public or private importance arises. A certificate must show clearly the ground on which discretion was exercised, and the mere recital that the matter is a fit case for appeal is insufficient. The certificate in question did not set out the question of law or the basis of fitness and was therefore defective.

Conclusion: The certificate was invalid and the appeal was incompetent.

Issue (ii): whether the stock-valuation dispute gave rise to any question of law so as to sustain the appeal.

Analysis: The agreement required the assets to be taken over at the book value appearing in the vendors' books, but the company valued the opening stock at a higher figure. The discrepancy was factual, and the concurrent view of the tax authorities treated the higher valuation as an inflation of opening stock. No question of law arose from the Tribunal's order on these facts.

Conclusion: No question of law arose from the valuation dispute, and the reference was incompetent.

Final Conclusion: The appeal could not be entertained and was liable to be dismissed, leaving the tax authorities' assessment undisturbed.

Ratio Decidendi: A certificate of fitness for appeal must expressly disclose the question of law and the ground of public or private importance relied upon; a bare certification that a case is fit for appeal does not satisfy section 66A(2) of the Indian Income-tax Act, 1922.

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