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Section 256 of the Income-tax Act, 1961 [Corresponding to section 66(2) of Indian Income-tax Act, 1922] - High Court - Reference to - Assessment years 1950-51 to 1952-53 - Assessee being lessee of forests, showed a shortage due to loss in transportations in river, etc. - ITO considering loss claimed as excessive, disallowed part of it - AAC reduced disallowance and Tribunal upheld AAC's decision, but none of them gave any reasons for their decision - Whether as there was no basis for AAC's decision and Tribunal had merely upheld AAC's order, without relying on any evidence on record, Tribunal's decision was not a finding of fact and it was bound to make reference - Held, yes FACTS The assessee worked leases of forests. The leases worked for four years and a consolidated P&L account was showed prepared in which theft of timber extracted due to loss in transport of timber in rivers. The ITO considering the loss claimed as excessive disallowed a part of it. On appeal, the AAC reduced the disallowance. On cross appeals, the Tribunal upheld the AAC's decision, and also refused to make reference under section 66(1). On application under section 66(2). HELD The AAC had reduced the amount of wastage of timber even from a figure allowed to the assessee-company by the ITO and for that prima facie from his order no basis was available. In the circumstances, this was a fit case in which a mandamus should issue to the Tribunal, to refer the question to the High Court. Note : The case decided in favour of the assessee. CASE REFERRED TO Lalchand Bhagat Ambica Ram v. CIT [1959] 37 ITR 288 (SC). JUDGMENT Mehar Singh, CJ.- This will dispose of three applications (Income-tax Cases Nos. 1, 2 & 3 of 1963) by R.B. Lala Jodha Mal Kuthiala (Kashmir) Limited, Jammu Tawi, the assessee-company, under section 66(2) of the Indian Income-tax Act, 1922 (Act 11 of 1922), corresponding to section 256(2) of the Income-tax Act, 1961 (Act 43 of 1961), in regard to three assessment years 1950-51, 1951-52 and 1952-53. The assessee-company worked leases of three forests, Lidder forest in Kashmir Province, and Udil and Khallor forests in Jammu Province of Jammu and Kashmir State. The leases…

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