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(1986) 53 Tax 122 (S.C.Pak) ) Sh. M. Imail & CO
(1986) 53 Tax 122 (S.C.Pak) ) Sh. M. Imail & CO
A.
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Section 66 to the Tribunal; the High Court was bound by the finding of
fact recorded by the Tribunal as being without any evidence, against
records or perverse and for that reason the finding recorded by the
Tribunal attained finality in terms of sub-section (6) of section 33 of the
Income Tax Act, 1922. [Page 127] C.
B.
We may also add that the function of High Court is cases referred
to it under Sec. 66 is advisory only and is confined to considering and
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answering the actual question referred to it; see Raja Bahadur Sir
Rejendra Naryan Bhanj Deo v. Commissioner of Income Tax (A.I.R. 1940
P.C. 158). The High Court was, therefore, justified in dismissing the
references on the ground that the matter was concluded by a finding of
fact and not going beyond it and taking up any other question. [Page
127] D.
Cases referred to : Raja Bahadur Sir Narayan Ghanj Deo v. C.I.T. (A.I.R. 1940
P.C. 158)
Muhammad Ilyas Khan, Advocate Supreme Court and Iftikhar
Ahmed, Advocate-on-Record, for the appellant.
Mohammad Amin Butt, Advocate Supreme Court and S. Wajid
Hussain, Advocate-on-Record for the Respondent.
Date of hearing : 2-7-1985
JUDGMENT
[The judgment of the court was delivered by Nasim Hasan
Shah. J.] This judgment will dispose of Civil Appeals nos.148, 149
and 150 of 1972, as a common question of law arises in all these
matters.
Briefly stated the facts relevant to these appeals are that the
respondent is a private joint stock company limited by share liability
incorporated under the provisions of Companies Act, 1913 (hereinafter
referred to as the assessee) and is engaged in the business of ginning
cotton. The dispute relates to the assessment years 1966-67, 1967-68,
1968-69. During these assessment years the assessee had paid
substantial interest to various banks form which overdrafts had been
secured. At the same time the Managing Director of the assessee
company, Mian Aziz a. Sheikh, had borrowed substantial amounts free
of interest from the company. The Income Tax Officer held that as the
loans taken by the company were diverted to the Managing Director who
utilized the money on his personal account, the entire interest paid by
the company could not be treated as interest on capital borrowed for
purposes of the business of the company. The Income Tax Officer
consequently disallowed the sums of Rs.43,559/-, Rs.99,935/- and
Rs.84,691/- in the three years respectively. This action was confirmed
by the Appellate Assistant Commissioner. But no further appeal filed
before the Income Tax Appellate Tribunal, the Tribunal deleted the
additions in toto. In doing so it observed: -We are, however, of the opinion that the funds available were
greater than the borrowings of the Managing Director and there is
apparently no bar on a business concern to advance its own
funds or utilize them in the particular manner. It is at the same
time patent that out of non-interest bearing finances certain
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that the need for borrowed capital should have arisen because the
funds available out of the Companys own finances were insufficient. It
could never be intention of the law to provide facilities for Directors of a
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We note that the question being raised before us was not the
question that was referred to the High Court by the Commissioner of
Income Tax because therein the finding of fact recorded by the Tribunal
had not been challenged. Since the High Court cannot disturb or go
behind any finding of fact given by the Tribunal even on the ground that
there is no evidence to support it, unless it has been first expressly
challenged by and question raised in the reference application under
Section 66 to the Tribunal; the High Court was bound by the finding of
fact recorded by the Tribunal as being without any evidence, against
records or perverse and for that reason the finding recorded by the
Tribunal attained finality in terms of sub-section (6) of section 33 of the
Income Tax Act, 1922.
We may also add that the function of the High Court in cases
referred to it under Section 66 is advisory only and is confined to
considering and answering the actual question referred to it; see Raja
Bahadur Sir Rajendra Naryan Bhanj Deo v. Commissioner of Income Tax
(A.I.R. 1940 P.C. 158). The High Court was, therefore, justified in
dismissing the reference on the ground that the matter was concluded
by a finding of fact and not going beyond it and taking up any other
question.
The judgment of the High Court is unexceptionable and these
appeals accordingly must fail. They shall, therefore, stand dismissed.
The parties, however, will be left to bear their own costs.
Appeals dismissed
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