Tribunal findings of fact bind reference jurisdiction; High Court cannot reappreciate evidence and exclude jute profits.

In a reference under section 66(1) of the Indian Income-tax Act, 1922, the High Court could not disregard the Tribunal's factual findings or reappreciate evidence unless a question of law arose from those findings. The Tribunal had found, on the evidence, that the jute transactions were those of the assessee-company and not of the alleged principal, and that finding was binding in the advisory jurisdiction. By substituting its own view on contemporaneous records, financing, and brokerage entries, the High Court exceeded its jurisdiction. The profit from the jute transactions was therefore properly includible in the assessee-company's total income.

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Issues: Whether the High Court, in exercise of its advisory jurisdiction, could disregard the Tribunal's findings of fact and answer the reference by reappreciating the evidence; and whether the profit from the jute transactions was liable to be included in the assessee-company's total income.

Analysis: The Tribunal's conclusion that the jute transactions were those of the assessee-company and not of the alleged principal was founded on appreciation of evidence and was a finding of fact. In a reference under section 66(1) of the Indian Income-tax Act, 1922, the High Court was bound by such findings and could answer only questions of law arising out of the Tribunal's order. The High Court, however, treated matters of evidentiary appreciation as open for fresh determination and substituted its own view on the absence of contemporaneous records, financing, and brokerage entries, although no error of law in the Tribunal's approach was shown.

Conclusion: The High Court exceeded the limits of its advisory jurisdiction. The Tribunal's finding stood, and the profit was properly includible in the assessee-company's total income.

Ratio Decidendi: In a reference under section 66 of the Indian Income-tax Act, the High Court cannot interfere with or reappreciate findings of fact recorded by the Tribunal unless a question of law arises from those findings.

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