Commissioner of Income Tax vs Ratnakar Shipping Co. Ltd.

Sen, J.—The following two questions of law have been referred by the Tribunal 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 justified in holding that the proceedings initiated by the income tax Officer u/s 147(b) of the income tax Act, 1961, and the reassessment made thereon was not in accordance with law and, therefore, the reassessment was fit to be cancelled?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the relief u/s 80J should be allowed at the rate of 6 per cent of the capital employed for the whole year without any limitation or on proportionate time basis?"

Question No. 1 relates to the assessment years 1973-74 to 1975-76, for which the relevant periods of account are the years ending on 31-3-1973,31-3-1974 and 31-3-1975, respectively, and question No. 2 relates to the assessment year 1976-77, for which the relevant period of account is the year ending on 31-3-1976.

The Tribunal has categorically found that when the ITO made the original assessments all the facts and the law laid down by the Supreme Court in the cases of Challapalli Sugar Ltd., Bombay Steam Navigation Co. Ltd. and India Cement Ltd. were before the ITO. This finding of the Tribunal has not been challenged as perverse. In the circumstances, question No. 1 must be answered in the affirmative and in favour of the assessee.

The second question is concluded by the decision in the case of CIT v. Oyster Packagers (P.) Ltd. [1985] 152 ITR 471/ 21 Taxman 115 (Cal.). Following the principles laid down in that case, the second question must also be answered in the affirmative and in favour of the assessee.

In view of the above, both the questions are answered in the affirmative and in favour of the assessee. There will be no order as to costs.

Banerjee, J.

I agree.