Commissioner of Income Tax vs B.M. Salgaocar and Bros. (P) Ltd.

M. Rama Jois, J.—The Commissioner of Income Tax, Karnataka, has presented this petition u/s 256(2) of the Income Tax Act, 1961,

praying for the issue of a direction to the Income Tax Appellate Tribunal, Bangalore Bench, to draw up a statement of case and refer the following

five questions of law for the opinion of this court :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in upholding the order of the Commissioner of

Income Tax (Appeals) who directed the Income Tax Officer to grant investment allowance without deducting the subsidy received from the

Government from the cost of the assets ?

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in upholding the order of the Commissioner of

Income Tax (Appeals) who held that depreciation should be granted without deducting the subsidy amount of Rs. 15 lakhs from the cost of the

plant and machinery ?

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in upholding the order of the Commissioner of

Income Tax (Appeals) who held that the amount of Rs. 1,25,797 paid as compensation to agriculturists is allowable as revenue expenditure ?

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in law in upholding the order of the Commissioner

of Income Tax (Appeals) who deleted the addition of Rs. 39,02,450 made by the Income Tax Officer in respect of revaluation of closing stock of

iron ore ?

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in upholding the order of the Commissioner of Income

Tax (Appeals) who deleted the interest of Rs. 37,53,090 by relying on the decision of the Mysore High court in the case of Commissioner of

Income Tax, Mysore Vs. United Breweries, and other decisions which have no application to the case ?

As far as question No.(4) is concerned it is not a question of law which we should call for reference. As far as questions Nos.(1),(2),(3) and (5)

are concerned, in our view, such questions of law do arise for consideration and, accordingly, we make the following order :

(i) The civil petition is allowed.

(ii) A direction shall issue to the Tribunal to draw up a statement of case and refer questions Nos. (1),(2),(3) and (5) for the opinion of this court.