DIPAK KUMAR SEN, J. ( 1 ) THE facts found or admitted in, and the proceedings leading up to, this reference are, inter alia, that Rampooria Brothers Pvt. Ltd. , the assessee, is a private limited company which was incorporated some time in 1953. One of the objects of the assessee as recorded in its memorandum of association is as follows :"to lend money to such persons or companies and on such terms as may seem expeditious, and in particular to customers and others having dealings with the company and to guarantee the performance of the contracts or payment of money to any such persons or companies. " ( 2 ) IN the year 1963-64, the assessee furnished a guarantee in respect of certain contracts of carriage by one Great India Boat Company from one part of India to another through the territories of Pakistan for which sanction was granted by the Collector of Land Customs. In December, 1967, the assessee furnished counter-indemnity in respect of a loan of over Rs. 3,00,000 in favour of Bokaro Steel Ltd. at the request of one Asian Refractories Ltd. The aforesaid guarantee and the indemnity were furnished by the assessee without consideration. ( 3 ) SOME time in July, 1968, the assessee guaranteed payment of a loan of Rs. 1 lakh with interest which was obtained by the said Asian Refractories Ltd. from the United Bank of India. The terms of the loan were that the principal amount and the interest thereon would be repaid by the Asian Refractories Ltd. by January 31, 1970. The assessee guaranteed the repayment of the said principal amount and interest and in the event of the failure of Asian Refractories Ltd. , to pay the said debt within the due date undertook to make the payment out of rents receivable from premises No. 8, Ballygunge Circular Road, Calcutta, a property belonging to the assessee. ( 4 ) ASIAN Refractories Ltd. , the debtor, suffered losses between 1966 and 1968. The financial position of the debtor deteriorated thereafter and its factory was closed in 1969. By an order dated March 25, 1969, this court in its company jurisdiction directed the debtor to be wound up. Subsequently, in 1971, the undertaking of the debtor was taken over by the Central Government for which compensation was determined to be payable by the Government to the debtor at Rs. 81 lakhs. By an order dated March 25, 1969, this court in its company jurisdiction directed the debtor to be wound up. Subsequently, in 1971, the undertaking of the debtor was taken over by the Central Government for which compensation was determined to be payable by the Government to the debtor at Rs. 81 lakhs. ( 5 ) THE debtor having failed to pay the principal amount of loan and interest thereon to the United Bank of India, the latter enforced the guarantee furnished by the assessee. The assessee paid to the United Bank of India in aggregate Rs. 1,36,800 of which Rs. 98,559-88 was paid in instalments between February 26, 1970, and March 3, 1978, and the balance of Rs. 39,240. 12 were paid in instalments between January 16, 1971, and January 21, 1971. ( 6 ) IT is on record that the assessee did not prefer any claim with the official liquidator in charge of liquidation of the debtor. The assessee wrote off the said amount of Rs. 1,36,800 in its accounts for the year ending May 31, 1971. ( 7 ) THE assessee was assessed to income-tax in the assessment year 1972-73, the accounting year ending on May 31, 1971. In its assessment, the assessee claimed a deduction of the said amount of Rs. 1,36,800 as a business expenditure. The Income-tax Officer found that the main sources of the income of the assessee were rent from house property and boat hire but furnishing guarantees was not a part of the normal business of the assessee. The Income-tax Officer found further that the assessee had not received any consideration for standing as guarantor. The Income-tax Officer noticed further that the assessee had not attempted to realise the amount paid by it on the guarantee from Asian Refractories Ltd. , the debtor, nor did it file any claim before the official liquidator for the said amount. The Income-tax Officer noted further that on the said claim of Rs. 1,36,800, the assessee had paid to the United Bank of India Rs. 98,559. 88 by March 3, 1970, which was not within the relevant accounting year. ( 8 ) THE Income-tax Officer disallowed the claim of the assessee for deduction of the said Rs. 1,36,800 either as business expenditure or as loss. ( 9 ) BEING aggrieved, the assessee preferred an appeal from the assessment before the Appellate Assistant Commissioner. 98,559. 88 by March 3, 1970, which was not within the relevant accounting year. ( 8 ) THE Income-tax Officer disallowed the claim of the assessee for deduction of the said Rs. 1,36,800 either as business expenditure or as loss. ( 9 ) BEING aggrieved, the assessee preferred an appeal from the assessment before the Appellate Assistant Commissioner. In the appeal, the assessee was not able to produce any documents or evidence to show that there was any commercial consideration for which the assessee had stood guarantor for Asian Refractories Ltd. , the debtor. The Appellate Assistant Commissioner noted that no agreement had been executed by the assessee with the principal debtor, Asian Refractories Ltd. , on the basis of which the guarantee has been furnished by the assessee. Accordingly, the Appellate Assistant Commissioner upheld the disallowance of the deduction of the said amount of Rs. 1,36,800 and dismissed the appeal. ( 10 ) BEING aggrieved, the assessee preferred a further appeal before the Income-tax Appellate Tribunal, It was contended on behalf of the assessee before the Tribunal that furnishing guarantees was a part of the normal business of the assessee as authorised by its memorandum of association. It was also sought to be contended-that the assessee had been entitled to charge a commission at the rate of 2 1/2% from the debtor in respect of the said guarantee and, as such, the guarantee had been furnished for adequate consideration. ( 11 ) THE Tribunal found that the sources of income of the assessee were rent from property, interest on deposits and boat hire. The Tribunal found further that the furnishing of the guarantee in issue had no connection with the said sources of income. Construing the relevant clause of the memorandum of association of the assessee, the Tribunal came to the conclusion that under the said clause, the assessee was permitted to guarantee the loans to third parties who were customers of and had dealings with the assessee and not to strangers. The Tribunal held that the provisions of the memorandum were merely permissive and by themselves did not lead to any conclusion that any activity carried on by a company permitted by its memorandum would constitute business. The Tribunal noted that the assessee had furnished guarantees and indemnities earlier without any consideration to other parties. The Tribunal held that the provisions of the memorandum were merely permissive and by themselves did not lead to any conclusion that any activity carried on by a company permitted by its memorandum would constitute business. The Tribunal noted that the assessee had furnished guarantees and indemnities earlier without any consideration to other parties. It was found that in the instant case, there was no evidence that the principal debtor had agreed to pay to the assessee a commission at the rate of 2 1/2%. A letter which was sought to be produced by the assessee before the Tribunal recording the agreement to pay such commission was not accepted as evidence. The Tribunal also noted that there was no document or agreement in writing between the assessee and the principal debtor recording the terms and conditions of the guarantee. The Tribunal noted that it was well known that from 1966 onwards the principal debtor had been in financial difficulties in spite whereof the assessee had furnished the guarantee without any security whatsoever. The Tribunal also noted that no steps had been taken by the assessee to realise the amount paid by it under the guarantee from the principal debtor. On the facts, the Tribunal came to the conclusion that the assessee furnished the guarantee not in the course of its business or for any commercial consideration but the same was really in the nature of an accommodation furnished to the principal debtor on extra-commercial consideration. The appeal of the assessee was rejected. ( 12 ) ON an application of the assessee under Section 256 (1) of the Income-tax Act, 1961, the following question has been referred as a question of law arising out of the order of the Tribunal for the opinion of this court:"whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in confirming the disallowance of loss incurred by the assessee and amounting to Rs. 1,36,800 in guaranteeing the loan advanced to Asian Refractories Limited by the United Bank of India ?" ( 13 ) AT the hearing, learned advocate for the assessee submitted that the Tribunal has patently misread the relevant clause in the memorandum of association of the assessee. 1,36,800 in guaranteeing the loan advanced to Asian Refractories Limited by the United Bank of India ?" ( 13 ) AT the hearing, learned advocate for the assessee submitted that the Tribunal has patently misread the relevant clause in the memorandum of association of the assessee. The said clause, which has been noted earlier, clearly permitted the assessee to lend money or to guarantee the performance of contracts or payment of money by any person or company irrespective of whether the latter were customers of and had transactions with the assessee or not and the entire finding of the Tribunal has been vitiated by misconstruction, of the said clause. Learned advocate submitted further that the assessee had sought to produce evidence before the Tribunal to establish that there was consideration for furnishing the said guarantee, being a commission of 2 1/2%, but the Tribunal wrongly rejected the said evidence. The Tribunal was the final fact-finding authority and it should have either accepted or considered the evidence or should have remanded the matter to the authority below for consideration of fresh evidence. Learned advocate submitted that the order of the Tribunal was vitiated by the aforesaid and from the facts on record it was open to this court, in its advisory jurisdiction, to pronounce that the disallowance of the loss claimed by the assessee was unjustified. In support of his contentions, learned advocate cited Karanpura Development Co. Ltd. v. CIT. Learned advocate submitted that the order of the Tribunal was vitiated by the aforesaid and from the facts on record it was open to this court, in its advisory jurisdiction, to pronounce that the disallowance of the loss claimed by the assessee was unjustified. In support of his contentions, learned advocate cited Karanpura Development Co. Ltd. v. CIT. In this case, the Supreme Court quoted with approval an observation of Lord Sterndale, M. R. in IRC v. Korean Syndicate Ltd. [1921] 12 TC 181 (CA) as follows (at page 371 of 44 ITR):"an individual comes into existence for many purposes, or perhaps sometimes for none, whereas a limited company comes into existence for some particular purpose, and if it comes into existence for the particular purpose of carrying out a transaction by getting possession of concessions and turning them to account, then that is a matter to be considered when you come to decide whether doing that is carrying on a business or not," ( 14 ) LEARNED advocate also cited the decision in CIT v. S. P. Jain for the following observations (at page 381):"in our view, the High Court and this court have always the jurisdiction to intervene if it appears that either the Tribunal has misunderstood the statutory language, because the proper construction of the statutory language is a matter of law, or it has arrived at a finding based on no evidence or where the finding is inconsistent with the evidence or contradictory of it, or it has acted on material partly relevant and partly irrelevant or where the Tribunal draws upon its own imagination, imports facts and circumstances not apparent from the record, or bases its conclusions on mere conjectures or surmises, or where no person judicially acting and properly instructed as to the relevant law could have come to the determination reached. In all such cases, the findings arrived at are vitiated. " ( 15 ) LEARNED advocate for the Revenue contended, to the contrary. He submitted that none of the facts found by the Tribunal had been challenged by the assessee as perverse or based on no evidence or irrelevant evidence and the facts as found stood unchallenged. Learned advocate also pointed out that Rs. 98,559. 88 had been paid by the assessee against the guarantee not in the assessment year involved but in an earlier assessment year. Learned advocate also pointed out that Rs. 98,559. 88 had been paid by the assessee against the guarantee not in the assessment year involved but in an earlier assessment year. This had been noted by the Income-tax Officer. ( 16 ) ON a consideration of the facts and circumstances of the case, the submissions on behalf of the parties and the decisions cited, it appears to us that the Tribunal had sufficient evidence before it to come to the conclusion that the guarantee furnished by the assessee was not a normal business transaction of the assessee and that the same had been furnished on extra-commercial considerations. These findings have not been challenged specifically by the assessee. No doubt, the Tribunal has not scanned the relevant clause in the memorandum of association properly or with care as it should have done but the same cannot vitiate the finding of the Tribunal which is based on other evidence. It is not disputed that there was no agreement in writing by and between the assessee and the principal debtor on the basis of which the guarantee had been furnished ; no evidence was furnished by the assessee before the income-tax Officer or the Appellate Assistant Commissioner to show that the assessee would be entitled to charge a commission on the guarantee to be furnished and at the last stage before the Tribunal, the assessee came up with a letter which was not accepted by the Tribunal. The assessee has not challenged the decision of the Tribunal refusing to accept the said letter and we have to answer the question on the basis of the evidence on record. ( 17 ) WE also note that the major portion of the amount paid by the assessee under the guarantee was not in the relevant assessment year but in an earlier assessment year. ( 18 ) FOR the reasons as aforesaid, we are unable to accept the contentions of the assessee. We answer the question referred in the affirmative and in favour of the Revenue. In the facts and circumstances, there will be no order as to costs.