Commissioner of Income Tax vs Sarabhai Chemicals Pvt. Ltd. (Amalgamated with Alkapuri Investment (P) Ltd.)

G.T. Nanavati, J.—The Commissioner of Income Tax has filed this application, as the Tribunal has refused to refer to this court the question

proposed by him. The question which the Commissioner wanted the Tribunal to refer to this court reads as under :

Whether the Appellate Tribunal is right in law and facts in setting aside the order made by the Commissioner of Income Tax u/s 263 of the Income

Tax Act, 1961, wherein he had set said set aside the assessment order for the limited purposed of considering the deductibility of Rs. 2,20,533 u/s

80V by the Income Tax Officer ?

The Tribunal, in terms, has found that no part of profit arising from the undertaking and business of the assessee for the year prior to February

28, 1977, had been transferred to Elscope Pvt. Ltd. The Tribunal also found that the Department has assessed the profit for the assessment years

1976-77 and 1977-78 in the hands of the assessee-company and not in the hands of the transferee-company. The Tribunal, therefore, rightly came

to the conclusion that the assessee had remained the rightful owner of the profits which had arisen from the said undertaking and business prior to

February 28, 1977. Since the profit of the assessment years 1976-77 and 1977-78 were assessed in the hands of the assessee and not in the

hands of Elscope Pvt. Ltd., the liability for payment of taxes in respect thereto was of the assessee. Thus, the claim of the assessee was well

founded and rightly the Income Tax Officer had not committed any error in allowing the claim. The findings which have been recorded by the

Tribunal are all findings of fact. It cannot be said that the Tribunal has misconstrued the relevant documents. Therefore, no question of law arose

and the Tribunal was justified in rejecting the applicant''s application. This application is, therefore, dismissed.

Rule is discharged with no order as to costs.