Commissioner of Income Tax vs Tata Engineering Locomotive Co. Ltd.

Kania, Actg.C.J.

This is a reference on the case stated u/s 256(1) of the Income Tax Act, 1961, read with section 18 of the Super Profits Tax Act, 1963. The assessment year with which we are concerned is the assessment year 1963-64. The question relates to the computation of capital of the assessee-company for the calculation of standard deduction permissible to it under the Super Profits Tax Act. The questions referred to us for our opinion are as follows :

"(1) Whether, on the facts and in the circumstances of the case, the excess amount of depreciation debited in the books of account over the figure allowed for assessment to Income Tax is includible in the computation of capital under rule 1 of the Second Schedule to the Super Profits Tax Act, 1963 ?

(2) Whether the figure for provision for taxation is includible in the computation of capital under rule 1 of the Second Schedule to the Super Profits Tax Act, 1963 ?

(3) Whether provision for proposed dividends is includible in computing the capital under rule 1 of the Second Schedule to the Super Profits Tax Act, 1963 ?"

We are sorry to observe that the statement of the case submitted by the Tribunal in this case is almost an example how a statement of the case should not be drawn up. It is totally short on facts which are required for the determination of the questions referred. As far as question No. 1 is concerned, there is nothing in the statement of the case to indicate what was the amount provided for depreciation in the accounts of the assessee-company and what was the depreciation claimed by the assessee-company for tax purposes and allowed for the assessment years 1958-59 to 1961-62. All that the statement tells us is that Rs. 76,03,775 represents the difference between the depreciation provided in the accounts of the assessee and the depreciation claimed by the assessee, and it is not possible to answer question No. 1 merely on the facts set out in the statement of the case.

As far as question No. 2 is concerned, the statement of the case is completely silent as to which was the tax in respect of which the provision was made, whether there was any liability of the assessee to pay that tax and what was the extent of that liability.

As far as question No. 3 is concerned, there is nothing stated in the statement of the case as to which was the year in respect of whose (sic) dividends this amount was set apart and whether any such dividend was paid or not or what was the amount which was actually utilised for the payment of this dividend. Unfortunately, the judgment of the Tribunal is even shorter on facts than the statement of the case. We can understand that the Tribunal might not have considered it necessary to set out all the facts in the judgment, but, in that case, the facts should have been ascertained and set out in the statement of the case.

In the result, we remand the matter to the Tribunal for furnishing a proper statement of the case according to law, as, in our view, it is not possible to answer the questions referred on the basis of the facts set out in the statement of the case submitted by the Tribunal. Supplemental statement of the case be framed after giving an opportunity to both the parties of being heard.

No order as to costs.