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Section 260 of the Income-tax Act, 1961 - Decision of High Courts/Supreme Court on case stated - Whether provision of section 260 does not mean that instant High Court is bound to answer question of law referred to it by Tribunal for its opinion or to give its decision where a question raised is only and purely of academic interest and does not resolve real controversy - Held, yes FACTS A search operation took place at the business premises of the assessee- firm and the residential premises of the partners on 22-9-1987. Subse-quently, separate search operation was conducted at the residential premises of the partner 'G' of the said firm on 14-10-1987 wherein he surrendered certain amount as the income of the assessee-firm. That amount was accepted as excess stock found. The Assessing Officer initiated penalty proceedings under section 271(1)(c) against the assessee. The assessee contended that 'G' had surrendered in his statement, recorded under section 132(4), in the capacity of partner of the said firm during the course of search and the assessee was entitled to the immunity given under Explanation 5 to section 271(1)(c). The Assessing Officer rejected the plea on the ground that search in the case of firm had been concluded on 28-9-1987 whereas the surrender by 'G' came much later on 14-10-1987. Accordingly, the penalty was levied. On appeal, the Commissioner (Appeals) confirmed the order of the Assessing Officer. On further appeal, the Tribunal concluded that the search was not completed till 14 10-1987 and, thus, the assessee earned the immunity underExplanation 5 to section 271(1)(c). On merits, the Tribunal held that there was no excess stock with the assessee-firm. Whatever was the difference in stock, it might be on account of the difference in valuation as the assessee used to maintain account of the stock at cost whereas the valuation was done by the revenue on the basis of the market rate. Hence, the penalty imposed under section 271(1)(c) upon the assessee was set aside by the Tribunal. Against the said order the following three questions were raised by the revenue for reference to the High Court : 1. Whether the Tribunal was right in holding that…

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