Commissioner of Income Tax vs Puneet Trading and Investment Co. (P.) Ltd.

The petitioner seeks reference of the following question to this Court:

"Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that the sum of Rs. 8,777 transferred by the assessee to preference share redemption was to be reduced in computing the distributable income for the purpose of sections 104 and 109 of the income tax Act?"

The counsel for the petitioner states that in respect of the assessee itself for an earlier year, namely, the assessment year 1983-84, an identical question of law has been referred to this Court. In addition thereto, even in the case of Narang Trading Investment Co.''s case, reference has been ordered by this Court on 4-11-1991 in ITO 37/91.

The counsel for the respondent states that reference should not be called for because the amount of tax involved is very little and, secondly, the Act has been amended with effect from 1988-89. In our opinion, none of these two factors can be regarded as a relevant consideration for this Court while dealing with an application u/s 256(2). All that we have to see is whether a question of law arises or not. The fact that the Act has been amended prospectively is also of no consequence. It is immaterial as to whether the amount of tax involved is very little or very large. We, therefore, direct the Tribunal to state the case and refer the aforesaid questions to this Court. No order as to costs.