Commissioner of Income Tax vs Shree Laxmi Mills

B.P. Saraf, J.—By this reference under s. 256(1) of the IT Act, 1961, the Tribunal has referred the following two questions of law at the instance of the Commissioner and one question at the instance of the assessee. The first two questions at the instance of Department are :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding the unabsorbed depreciation computed in the assessee firm''s hands should be allowed to be carried forward in its own case to the extent to which the said depreciation had not been given or could not be given a set off in the assessments of its partners and that the order passed by the ITO under s. 154 of the IT Act, should be modified on such basis ?

"2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding to the effect that the unabsorbed depreciation computed in the hands of the assessee-firm should be allowed to be brought forward and set off against its income computed to the extent to which the said unabsorbed depreciation had not been or could not be given a set off in the hands of its partners ?"

The question at the instance of assessee is :

"Whether the Tribunal erred in holding that the rectification orders passed by the ITO in the four years were in respect of mistake apparent from record and thus within the jurisdiction legally vested in his under the provisions of s. 154 of the IT Act, 1961 ?

The learned counsel for the Revenue fairly submits that in view of the decision of Supreme Court, in the case of M/s. Garden Silk Weaving Factory, Surat Vs. The Commissioner of Income Tax, Gujarat, Ahmedabad, , the questions at the instance of the Revenue, are to be answered in the affirmative and in favour of the assessee. Both these questions are, therefore, answered accordingly.

So far as the question referred at the instance of the assessee is connected having regard to the decision of Supreme Court in the case of Commissioner of Income Tax, Kerala Vs. V. Damodaran, and also in view of the decision on the first two questions referred at the instance of the Revenue in the affirmative and in favour of the assessee, this question need not be answered. The reference is disposed of accordingly.

No order as to costs.