Chief Commissioner (Adman.) and Commissioner of Income Tax vs Bharath Earth Movers Ltd.

S.A. Hakeem, J.—The Income Tax Appellate Tribunal has referred the following question for the court''s opinion u/s 256(1) of the Income Tax Act, 1961 :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provision for accrued leave salary payable to the employees is an allowable revenue deduction in computing the total income ?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the technical information fees paid by the assessee is an allowable business expenditure ?

Whether, on the facts and in the circumstances of the case, the assessee was entitled to depreciation on roads and drains within the factory premises ?"

In so far as the first question is concerned, in the case of the same assessee, a substantially identical question was involved in I.T.R.C. No. 111 of 1987 for earlier years in which the tribunal was directed to prepare a supplemental statement of the case setting out the particulars of the scheme framed by the assessee in relation to the approved leave salary and the manner of its implementation. In the circumstances, the first question is not answered for the time being and is kept open.

In regard to the second question, the matter is concluded by the Full Bench decision of this court in Mysore Kirloskar Ltd. Vs. The Commissioner of Income Tax, Bangalore, Following the said decision, the second question is answered in the affirmative and against the Revenue.

In so far as the third question is concerned, the matter is covered by the Division Bench decision of this court in Commissioner of Income Tax Vs. Bangalore Turf Club Limited, Following the said decision, the third question is answered in the affirmative and against the Revenue.

The revenue is at liberty to mention for the posting of the matter in so far as the first question is concerned after the disposal of I.T.R.C. No. 111 of 1987.