Judgment :- In compliance, with the requisition of the High Court under section 66(2) of the Indian Income-tax Act in Tax Case Petition No. 21 of 1960, dated 4th August, 1960, we state the case, agreed to by the parties, and refer it to the High Court. This questions of law on which the Tribunal has been directed to state the case are as follows : "(1) Whether, on the facts and in circumstances of the case, the Tribunal was justified in refusing to admit the additional grounds of appeal ? (2) Whether the computation of the profits with reference to the sale of a portion of the properties was justified in law ?" * We shall, therefore, confine ourselves as far as possible to the facts relevant to those questions. 2. The assessee's father, Kadiresan Chettiar, and one Arunachalam Chettiar were carrying on money-lending business in partnership at Ceylon and when the partnership was dissolved by the death of the assessee's father on 29th May, 1935, that partnership owned a number of properties; one of such, which came to the share of the assessee, was Girivalai Estate. The assessee was a minor aged 9 at the time of his father's death. The assessee attained majority in or about March, 1947, and from then on until 1956-57, a number of assessments had been made against him. All these assessments proceeded on the footing that the properties acquired by the partnership and which came to the assessee on partition were stock-in-trade of the business. When the income-tax department sought to tax the profits on the sale of portions of the properties which came to the assessee's share on the determination of the partnership, the only contention taken by the assessee was that the profits could not be ascertained until the entire estate was sold and no assessment should be made in respect of sales of portions of the estate as and when each portion was sold. 3. In the assessment year 1956-57, the accounting year for which ended on March 31, 1956, the assessee sold 54 acres out of the total of 276 acres, the extent of that estate, for Rs. 1, 54, 750. The Income-tax Officer calculated the cost price of the estate purchased in 1930-31 at Rs. 1, 30, 180. 3. In the assessment year 1956-57, the accounting year for which ended on March 31, 1956, the assessee sold 54 acres out of the total of 276 acres, the extent of that estate, for Rs. 1, 54, 750. The Income-tax Officer calculated the cost price of the estate purchased in 1930-31 at Rs. 1, 30, 180. It was not denied before him that the estate had been acquired in the course of the money-lending business of the assessee. He, therefore, arrived at a profit of Rs. 24, 570 on the sale. He brought this to tax. 4. While appealing to the Appellate Assistant Commissioner, the assessee did not contend that the sale was not in the course of the business or that profit or loss, if any, would not be assessable. His only contention was that the Income-tax Officer erred in fixing the cost of the estate at Rs. 1, 30, 180, which was only the original cost whereas the actual cost should be Rs. 1, 97, 311.69, less amounts realised by sales already made, i.e., 33, 575, or, in other words, Rs. 1, 63, 736.59. The assessee, on that basis, claimed a loss of Rs. 8, 936 either in the year of account or at a future date when there were further sales. The Appellate Assistant Commissioner, having regard to the paucity of material on record, remanded the case to the Income-tax Officer to consider this contention of the assessee. 5. The Income-tax Officer, in the remand report, conceded that the actual cost of the entire estate was Rs. 1, 89, 292 before the deduction of the sale price or part thereof Rs. 33, 575. This was agreed to by the advocate for the assessee. The Income-tax Officer also remarked that though the total cost of the estate was Rs. 1, 89, 292, it was the cost of 276 acres, and as only 54 of these had been sold, if the proportionate cost had been worked out, the actual profit would come to Rs. 1, 32, 776. In order to compute the correct profits, the Appellate Assistant Commissioner gave notice of enhancement of the assessee and heard the appellant's representative. No objection in writing was furnished. It was again urged that the question of determination of the profits on the sales of portions of the estate cannot arise in the year of account. 1, 32, 776. In order to compute the correct profits, the Appellate Assistant Commissioner gave notice of enhancement of the assessee and heard the appellant's representative. No objection in writing was furnished. It was again urged that the question of determination of the profits on the sales of portions of the estate cannot arise in the year of account. It was also urged that previously the Income-tax Officer had adopted once or twice the principle of assessing the profits on such transactions as arising fully only when the whole of the estate had been duly sold. The Appellate Assistant Commissioner held, after considering his arguments and adverting to a few decisions, that each "previous year" was a distinct unit of time for the purpose of assessment, and relying upon the decision of the Madras High Court in VR. K.R.S. Firm, Kuala, Kangsar by partner V.S. Sivalingam Chettiar, Poolankurichi (C.M.P. No. 8125 of 1953) (see infra page 56) held that the contention, that until all the properties are sold, the profits could not be ascertained and, therefore, the assessee should not have been assessed to tax, had no substance. He, therefore, calculated the profit at Rs. 1, 17, 715 in lieu of Rs. 24, 570 originally calculated by the Income-tax Officer. 6. The assessee appealed to the Tribunal and contended that the computation of profits by the Appellate Assistant Commissioner was wrong, that the hitherto obtaining practice of calculating the profit only when the whole of the estate had been sold, should have been followed and that profits on part sales should not be calculated by proportionately working out the cost of such part; and that there was no basis for the computation made by the Appellate Assistant Commissioner. 7. At the time of the hearing of the appeal before the Tribunal, the assessee sought to file supplementary grounds of appeal as follows : (11/16 of Rs. 1, 17, 715 - Profit on sale of Girivalai Estate) (1) The assessment of the profit on the sale of Girivalai estate is against law, weight of evidence and probabilities of the case. (2) The excess realisation on the sale of the estate is a capital accretion and not income liable to taxation. 1, 17, 715 - Profit on sale of Girivalai Estate) (1) The assessment of the profit on the sale of Girivalai estate is against law, weight of evidence and probabilities of the case. (2) The excess realisation on the sale of the estate is a capital accretion and not income liable to taxation. (3) The estates were inherited by the appellant and by the sale of one of the estates there is only a realisation of investment and the excess is only a capital receipt and not liable to tax. (4) The appellant submits that the estates were not stock-in-trade of any business and sale is not in the course of any business and hence the assessment of excess as a business profit is illegal. (5) The appellant states that the treatment hitherto of the difference on sale of estates as any revenue profit or loss was a mistake in law and fact and should be rectified against. (6) The appellant submits that for these reasons and other reasons to be advanced at the time of the hearing of the appeal, the profits on the sale of Girivalai estate is not income liable to taxation and the assessment of such profit as revenue profit should be vacated.It was also urged that during the assessee's minority during 1935 to 1947, there was a court proceeding by an administrator, and there was no business carried on and so the assessment of the profits made on sale of the properties subsequent to the dissolution of the partnership should not be treated as sale of business assets and that the properties were only investments and excess realisations were only capital realisations not liable to income-tax. In support of the additional grounds of appeal and to justify the filing thereof, the assessee filed an affidavit, dated November 25 1958, before the Income-tax Appellate Tribunal, which is annexure "A" and forms part of the case. 8. The Tribunal held that these were new facts sought to be brought on record for the first time and had not been taken up before the income-tax authorities in all the assessments from 1947 up-to-date. As these new questions of fact, according to them, required taking of further evidence, and had been taken for the first time, they refused the assessee's request for leave to add the supplementary grounds of appeal. As these new questions of fact, according to them, required taking of further evidence, and had been taken for the first time, they refused the assessee's request for leave to add the supplementary grounds of appeal. On the merits, learned advocate for the assessee stated that there was no question about the correctness of the calculation made by the Appellate Assistant Commissioner. So, relying on the decisions of the Madras High Court already relied on by the Appellate Assistant Commissioner (C.M.P. No. 8125 of 1953, dated 25th March, 1954) (see infra page 56) they held the profits of Rs. 1, 17, 715 was correctly brought to tax. K.R. Ramamani for Sethuraman and Padmanabhan for the assessee. S. Ranganathan for the Commissioner. JUDGMENT JAGADISAN J. - One Kadiresan Chettiar and another Arunachalam Chettiar were partners in a money-lending business which they carried on at Ceylon. Kadiresan Chettiar died on 29th May, 1935, and the partnership became dissolved. In the course of that money-lending business, an estate called Girivalai Estate of an extent of about 276 acres was purchased and it is not in dispute that this estate was a stock-in-trade of the money-lending business at the time of the acquisition. The estate was purchased some time in the year 1931 for a sum of Rs. 1, 30, 180. At the time of Kadiresan Chettiar's death his only son, the assessee now before us was a minor aged about 9 years. On dissolution of the firm, this estate was allotted to the share of the assessee. He attained age in March, 1947 and he had been assessed to tax on his income. In the assessment proceedings it was not disputed that the properties acquired by the partnership represented stock-in-trade of the business. In the accounting year ended on March 31, 1956, that is, in the assessment year 1956-57, the assessee sold 54 acres out of the total of 276 acres of Girivalai Estate for Rs. 1, 54, 750. The Income-tax Officer calculated the cost price of the estate purchased in 1930-31 at Rs. 1, 30, 180 and took the view that the excess of Rs. 22, 570 was revenue receipt which could be brought to tax. The assessee preferred an appeal to the Appellate Assistant Commissioner. His contention was that the Income-tax officer went wrong in fixing the cost of the estate at Rs. 1, 30, 180 and took the view that the excess of Rs. 22, 570 was revenue receipt which could be brought to tax. The assessee preferred an appeal to the Appellate Assistant Commissioner. His contention was that the Income-tax officer went wrong in fixing the cost of the estate at Rs. 1, 30, 180 and that the actual cost should be computed as Rs. 1, 63, 736.30. On this basis he urged that there was a loss of Rs. 8, 936. As there were no materials available for the authority to determine whether the contention raised by the assessee was correct or not, he remanded the matter for fresh consideration by the Income-tax officer. The Income-tax Officer held after the remand that the assessee's contention that the cost should be fixed at Rs. 1, 89, 292 was correct. But he was further of the view that as only 54 acres out of the total of 276 acres were sold, if the proportionate cost had been worked out, the actual profit would come to Rs. 1, 32, 776. In order to assess the correct profits, the Appellate Assistant Commissioner gave notice of enhancement to the assessee and heard the appellant's representative. At that stage the only objection that was raised by him was that the question of determination of the profit cannot arise in the year of account, and that it would arise only after the entire estate is sold or disposed of. this contention was, however, negatived by the Appellate Assistant Commissioner, following the decision of this court (not reported) in VR. KR. S. Firm Kuala Kangsar v. Commissioner of Income-tax (C.M.P. No. 8125 of 1953 [See Appendix infra page 56.]).The assessee preferred an appeal against this decision to the Tribunal and for the first time raised a contention that the excess realisation was not a revenue receipt chargeable to tax but was really a capital accretion. This contention was based on the ground that the properties were really in the nature of capital investment made by the quondam money-lending firm, and that the sale of capital asset realising more income than what was invested would be a capital accretion and not a revenue receipt. This ground was not taken even in the memorandum of grounds of appeal to the Tribunal, but, as stated already, it was raised at the time of hearing of the appeal before the Tribunal. This ground was not taken even in the memorandum of grounds of appeal to the Tribunal, but, as stated already, it was raised at the time of hearing of the appeal before the Tribunal. The Tribunal held that it was not open to the assessee to raise the point for the first time, because the ground had not been raised earlier and that the ground, if permitted to be raised, would not merely require an investigation of further facts but also would amount to permitting the assessee to set up a case in conflict with the stand taken by him in the course of the assessment proceedings. In this view of the matter, the Tribunal declined permission to the assessee to raise that ground. The other question raised before the Tribunal, namely, that profits should not be computed till the entire estate is disposed of, was also negatived by the Tribunal, following the decision of this court already referred to. It is against this order the assessee camp up to this court in reference under section 66(2) and this court directed the Tribunal to refer the following question : "1. Whether on the facts and in the circumstances of the case the Tribunal was justified in refusing to admit the additional grounds of appeal ? 2. Whether the computation of the profits with reference to the sale of a portion of the properties was justified in law ?" * It is quite clear that the assessee's contention that the receipt was of a capital nature was raised only for the first time before the Tribunal. It is no doubt open to the Tribunal to permit the assessee to raise the contention, though it might involve an investigation of fresh facts under rule 12 of the Income-tax Appellate Tribunal Rules. The question is one of discretion to be exercised by the Tribunal on the facts and circumstances of each case. We are unable to say that, having regard to the facts and circumstances of this case, the Tribunal in any way exercised its discretion illegally or improperly in declining permission to the assessee to raise the point. Mr. The question is one of discretion to be exercised by the Tribunal on the facts and circumstances of each case. We are unable to say that, having regard to the facts and circumstances of this case, the Tribunal in any way exercised its discretion illegally or improperly in declining permission to the assessee to raise the point. Mr. Ramamani, the learned counsel for the assessee, contends that there can be no estoppel or any other legal bar to the assessee raising the point, as he must have been under a bona fide misapprehension that what was originally stock-in-trade during the subsistence of the firm continued that character despite the fact that the money-lending business itself ceased and despite also the fact what all the assessee did was to realise the assets of the previous firm. But these are questions of fact upon which there are no materials to enable us to reach any conclusion either way. It might be that the assessee's guardian or "administrator" carried on money-lending business during the minority of the assessee and employed the stock-in-trade of the previous business as stock-in-trade of the fresh business or it might be equally the other way. The only question before us is whether the Tribunal was right in refusing permission to the assessee to raise the point before it. The matter is purely one of discretion and there are no materials to hold that it was not properly exercised. In this view of the matter, question No. 1 is answered against the assessee.It is conceded by the learned counsel for the assessee that in regard to question No. 2, the matter is entirely covered by the decision of this court in VR. KR. S. Firm Kuala Kangsar v. Commissioner of Income-tax (C.M.P. No. 8125 of 1953 (see Appendix below). This question is also answered against the assessee. The assessee will pay the costs of the department. Counsel's fee Rs. 250. C.M.P. No. 8125 of 1953 The immovable properties acquired by the assessee in the course of the money-lending business really constituted his stock-in-trade. The contention that until all the properties are sold, the profits could not be ascertained and therefore the assessee should not have been assessed to tax has no substance, as in the case of stock-in-trade as and when each item is sold the profits earned by such sale could easily be ascertained. The contention that until all the properties are sold, the profits could not be ascertained and therefore the assessee should not have been assessed to tax has no substance, as in the case of stock-in-trade as and when each item is sold the profits earned by such sale could easily be ascertained. The view taken by the Tribunal is correct and no question of law can arise from the Tribunal's order. The petition is dismissed with costs, Rs. 150.