Commissioner of Income Tax vs North Brook Jute Co. Ltd.

Ajit Kumar Sengupta, J.—At the instance of the Commissioner of Income Tax, West Bengal, the following questions of law have been referred to this court 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 reassessment made by the Income Tax Officer was invalid and illegal ?

(2) Whether, on the facts arid in the circumstances of the case, reopening of the assessment was valid and legal u/s 147(b) of the Income Tax Act, 1961, if not u/s 147(a) of the said Act ?

(3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that a sum of Rs. 1,10,100 paid by the asses-see for the purchase of loom hours was a revenue expenditure deductible in the computation of its business income ?"

Having regard to the principles laid down by the Supreme Court, the assessee is entitled to succeed on merits. In that view of the matter, it is not necessary for us to answer the question referred to this court regarding the validity of the reassessment proceedings. In view of the judgment of the Supreme Court in the case of Empire Jute Co. Ltd. Vs. Commissioner of Income Tax, , the third question is answered in the affirmative, in favour of the assessee and against the Revenue.

In that view of the matter, we decline to answer questions Nos. 1 and 2.

There will be no order as to costs.

K.M. Yusuf, J.

I agree.