1969 (7) TMI 6

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....53, inter alia, for an allowance of Rs. 95,868 as provision for extraordinary legal and other expenses in computing its profits for the purposes of income-tax. The Income-tax Officer disallowed that claim holding, inter alia, that the payments which were made to different firms of solicitors for legal advice in the matter of certain irregularities of the assessee's directors and officials whereby the funds of certain companies under the management of the assessee were depleted would not be allowed. It is not necessary to state in detail about the irregularities but it is sufficient to note that they were reported by the chairman to the respondent-company and mentioned in the report dated December 12, 1952, of Messrs. Lovelock and Lewis, aud....

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.... be stated to the High Court for reference of the following two questions of law: "(1) Whether, on the facts and in the circumstances of the case, the conclusion of the Tribunal that the expenditure of Rs. 95,868 was wholly and exclusively incurred for the purpose of maintaining the goodwill and reputation of the assessee-company was based on no evidence or was perverse in the accepted sense of the term ? (2) Whether, in any event, on the facts and in the circumstances of the case, the Tribunal was right in holding that the said expenditure was allowable as a proper revenue deduction ?" By order dated February 11, 1966, the Tribunal stated a case to the Calcutta High Court and referred only the following question of law: "Whethe....

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.... no evidence before the Tribunal to come to the conclusion it did and alternatively on the material on record the conclusion was perverse in the sense that no reasonable man could come to the same finding. It appears to us that the question framed by the Tribunal was suggestive of the answer and the grievance of the Commissioner was not ill-founded. The statement of case by the Tribunal to the High Court was far from complete. In that statement the Tribunal after referring to the facts found by the Income-tax Officer and the Appellate Assistant Commissioner stated that: "Since the major item of Rs. 58,638 pertained to the bills of M/s. Orr Dignam & Co. the Tribunal perused the detailed statements of work done by M/s. Orr Dignam & Co. ....