Commissioner of Income Tax vs Darbhanga Laheriasarai Electric Supply Corporation Limited

These are references u/s 256(1) of the Income Tax Act, 1961 (hereinafter to be referred to as "the Act"). These references are concluded by two Division Bench decisions of this very assessed reported in Darbhanga Laheriasari Electric Supply Corporation Ltd. Vs. Commissioner of Income Tax, and Commissioner of Income Tax Vs. Darbhanga Laheriasarai Electric Supply Co., . In these references, we are concerned with the assessment years 1971-72 and 1972-73. The question referred to us for our opinion is exactly the same as those in the earlier cases, mentioned above, namely :

"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amount representing the contingency reserve does not form part of the commercial profit or real income of the assessee and is not includible in the total assessable income of the assessee relating to the assessment years 1971-72 and 1972-73 ?"

In view of the earlier Division Bench decisions of this court, these references must be answered against the Revenue and in favour of the assessee. We, therefore, hold that the Tribunal was correct in holding that the amount representing the contingency reserve did not form part of the commercial profit and real income of the assessee and was not includible in the total assessable income of the assessee relating to the assessment years 1971-72 and 1972-73. The references are answered accordingly. However, there will be no order as to costs.

Let a copy of this judgment be transmitted to the Assistant Registrar, Income Tax Appellate Tribunal, Patna, in terms of Section 260 of the Act.