Kerala High Court
Commissioner Of Income-Tax vs V. Prakashan on 14 July, 1994
Equivalent citations: [1995]211ITR119(KER)
Author: Chief Justice
Bench: Chief Justice
JUDGMENT Sujata V. Manohar, C.J.
1. This is a reference application under Section 256(2) of the Income-tax Act, 1961, at the instance of the Revenue. The relevant assessment year is 1983-84. The assessee, at the material time, derived income from plying buses in the name of Prakash Bus Service. During the previous year relevant to the assessment year in question, the assessee sold his bus for a consideration of Rs. 1,10,000. The bus had been purchased by the assessee on July 10, 1979, for Rs. 40,000. The assessee contended before the Income-tax Officer that the sale value of the bus alone was only Rs. 40,000 and the balance of Rs. 70,000 was the amount paid by the purchaser for obtaining the permit to ply on the route in question, i.e., the route value. This contention has been upheld by the Tribunal. The Revenue's application for making a reference under Section 256(1) has been rejected by the Tribunal. Hence, this petition is before us under Section 256(2) of the Income-tax Act for a direction that the Tribunal be asked to raise the following question and refer it to us :
"Whether, on the facts and in the circumstances of the case, the Tribunal is right and has materials in holding that,--
(i) the assessee is entitled to claim deduction for the route value ;
(ii) the amount of Rs. 70,000 was the route value ?
(iii) the addition of Rs. 70,000 in respect of capital gains is to be deleted ?"
2. The Tribunal has referred to the agreement between the assessee and the purchaser, the relevant portion of which is set out in the assessment order of the Income-tax Officer. The agreement recites as follows :
"Whereas the first party is the registered owner and possessor of Fargo Bus KLC 5533 plying on the route Chandayad-Tellicherry on pucca stage carriage permit, and ;
Whereas the first party is desirous of selling the vehicle along with the right over its pucca stage carriage permit, the second party offers a consideration of Rs. 1,10,000 (Rs. one lakh ten thousand only) and the payment to be made as follows :
Rs.
35,000 in cash at the time of taking delivery of the vehicle.
45,000 to be paid to Messrs. Roopa Auto Financiers, Bangalore, with interest and incidental charges.
30,000 to be paid on or before March 31, 1983.
1,10,000 and this offer and mode of payment are accepted by the first party and hence this agreement is entered into on the following terms and conditions."
3. The Tribunal has rightly come to the conclusion that the price includes not merely the price of the bus, but also the price for the pucca stage carriage permit for the route Chandayad-Tellicherry. The Tribunal has, therefore, allocated a portion of the price as being the amount paid for the purchase of the route in question. The Tribunal has further held that since the bus was sold by the purchaser as scrap within six months of the purchase, the break-up of Rs. 40,000 for the value of the bus and Rs. 70,000 for the value of the route was justified. All these findings are based on an appreciation of the facts which were before the Tribunal. The agreement of purchase also clearly sets out that both the bus as well as the stage carriage permit for the route in question were sold.
4. In the premises, in our view, no referable question of law arises which may require determination by this court, looking to the facts and circumstances of the present case. The reference application is, therefore, rejected.