ORDER
N.V. Balasubramanian, J.
1. These petitions are filed by the Revenue under s. 256(2) of the IT Act, 1961 to direct the Tribunal and state a case and refer the following questions of law for opinion of this Court :
“1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing the AO to allow the claim of depreciation and expenses incurred by the assessee for the assessment year under consideration ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in deciding the issue and in favour of the assessee on the basis of the materials which were produced after the orders of the AO and CIT(A) and could not have been made available by the assessee either to the AO or to the CIT(A) ?”
2. The assessee is a public limited company and for the asst. yrs. 1985-86 to 1987-88, it filed returns claiming loss of Rs. 58,86,185, Rs. 59,41,101 and Rs. 56,32,259 respectively. The assessee claimed deduction of certain expenses and depreciation allowance. The AO rejected the claim of the assessee on the ground that the assessee-company had stopped its production during the accounting years, and the plant was kept shut down. Accordingly, he ignored the loss returns filed by the assessee and closed the assessments as N.A. The assessee preferred appeals before the CIT(A). The CIT(A) found that there was no business activity carried on by the assessee during the relevant accounting years and the assessee-company had ceased its manufacturing activities w.e.f. 24th July, 1982. He also held that the assets were not used for the assessee’s business during the previous years to sustain the claim for depreciation allowance. According to the CIT(A), the business activity had not been resumed. Therefore, the CIT(A) held that the AO was justified in disallowing the expenditure and depreciation claimed by the assessee and in this view of the matter, he dismissed the appeals. The assessee preferred further appeals before the Tribunal. The assessee produced before the Tribunal the order of the Board for Industrial and Financial Reconstruction which formulated sanctioned scheme for rehabilitation of the assessee on 27th March, 1990, and the report of the Directors of the year 1990 wherein it is stated that after the receipt of the approved scheme, the assessee discussed the same with the financial institutions, banks which came to give financial support. The Tribunal, therefore, held that there are materials on record to show that there was lull in the manufacturing activity and the revival of industry has already taken place and now it is on stream. The Tribunal, therefore, directed the ITO to allow the claim of the assessee for all the three years.
3. The Revenue filed reference applications before the Tribunal seeking it to state a case to this Court and refer the questions of law set out in paragraph 1 above. The Tribunal held that since the finding of the Tribunal that there was a lull in business is a finding on fact, no question of law arose out of the order of the Tribunal.
4. Mr. C. V. Rajan, learned counsel for the Revenue submitted that the Tribunal was not justified in entertaining the new materials at the stage of hearing before the Tribunal and if the Tribunal was satisfied that the case should be considered in the light of the materials placed before it, it should have remitted the matter to the AO to determine the question whether the assessee had actually ceased to carry on business or there was lull in the activities of the assessee. He, therefore, submitted that the documents produced before the Tribunal are of the year 1990 and no reliance can be placed on those documents produced before the Tribunal. Mr. Janarthana Raja, learned counsel for the assessee, on the other hand, submitted that the finding of the Tribunal that there was a lull in the business of the assessee is a finding on fact and no question of law arises out of the orders of the Tribunal.
5. We have carefully considered the rival contentions of the parties and we have gone through the order of the Tribunal as well as the authorities. Though the assessee has not produced the additional documents before the AO or the CIT(A), the Tribunal entertained the additional documents. The question whether to admit or to reject the documents or whether the Tribunal should remit the matter or it can decide the question on the basis of new materials are all matters purely within the discretion of the Tribunal, and the scope of interference by this Court on the exercise of discretion by the Tribunal is limited. Hence, it is not possible to accept the contention of the learned counsel for the Revenue when the Tribunal entertained certain additional materials filed before it. The Tribunal should have remitted the matter. After perusing the contents of the documents, the Tribunal came to the conclusion that the AO’s view that the assessee-company had ceased its manufacturing activities and the assessee-company had intention to resume business activities is not correct. Though the documents relate to the year subsequent to the assessment years in question, still those documents have relevance to the question of determining the intention of the assessee to carry on its business. The Tribunal, after considering the documents came to the conclusion that there was only a lull in the manufacturing and the sanction of Board for Industrial and Financial Reconstruction clearly shows that the industry has to be revived. The finding of the Tribunal is that the revival had taken place and the assessee is now in the stream. The finding of the Tribunal that there was only a lull in the manufacturing activity of the assessee is based on the materials and the inference drawn by it on the materials should also be regarded as an inference on the facts and the finding of the Tribunal is a pure finding of fact. Therefore, we hold that the Tribunal came to the correct conclusion in holding that no referable question of law arises out of its order.
6. In the result, the tax case petitions are liable to be rejected and they are, accordingly, rejected. There will be no order as to costs.