COMMISSIONER OF Income Tax vs TRIBENI TISSUES LTD.

AJIT K. SENGUPTA J. - In this reference u/s 256(2) of the Income Tax Act, 1961, for the assessment year 1980-81, the following question of law has been referred to this court :

"Whether, on the facts and in the circumstances of the case, and on a proper interpretation of the provisions of section 32A of the Income Tax Act, 1961, the Tribunal was justified in law in holding that the additional equipment and apparatus comprising electric installation motors, drums, cranes, generators, balances, pumps, moisturising machines, were part and parcel of the plant and machinery and were used for manufacturing tissue papers and in that view in allowing investment allowance on the said item of assets?"

We, however, find that the Tribunal has drawn up a statement of case giving fact relating to an altogether different question which is not the subject-matter of this reference at all and that too for two different assessment years. The present reference relates to the assessment year 1980-81, whereas the Tribunal submitted the statement of case relating to the assessment years 1979-80 and 1980-81 arising out of other proceedings. It appears to us that the Tribunal did not apply its mind when the statement of case was prepared nor did the Revenue assist the Tribunal in making a correct statement of case.

The facts which have been incorporated in this case relate to the allowance of relief u/s 80J(1A)(II)(ii). It appears that for the assessment years 1979-80 and 1980-81, the Assessing Officer while computing income allowed relief u/s 80J on the capital employed in the paper industry which is a new industrial undertaking. However the assessing authority initiated proceedings u/s 154 of the Act for rectification of the order by which the relief u/s 80J was allowed. The assessee being aggrieved preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) allowed both the appeals on the ground, inter alia, that it was not a case u/s 154 of the Act as there was no error apparent on the face of the record. The Commissioner of Income Tax (Appeals) also decided in favour of the assessee on the allowance of the relief u/s 80J of the Act. The Department preferred an appeal before the Tribunal. The Tribunal affirmed the order of the Commissioner of Income Tax (Appeals) and held that rectification u/s 154 of the Act is not justified. The Tribunal also upheld the order of the Commissioner of Income Tax (Appeals) on the merits. Against the said consolidated order of the Tribunal, the Department made applications u/s 256(1) of the Act but the said applications were rejected by the Tribunal.

Thereafter the Department filed two applications u/s 256(2) of the Act before this court and rules were issued. Thereafter, on December 5, 1990, the said rules came up for hearing before a Division bench, when, after hearing learned counsel for both the parties the said rules were discharged.

In view of the discharge of the aforesaid rules, there is no scope for preparing any statement of case by the Tribunal on the question of relief u/s 80J of the Act for the assessment years 1979-80 and 1980-81.

The Tribunal, however, as it appears, prepared the statement of the case referring the correct question of law on investment allowance. But this question shall relate to the assessment year 1980-81 only and not for the assessment years 1979-80 and 1980-81. The Tribunal have, however, incorporated the facts for the assessment years 1979-80 and 1980-81 arising out of proceedings u/s 154. In a case like this, we would have called for a supplementary statement of case. But since the question referred is concluded by a decision of this court, it is not necessary to ask for a supplementary statement of case.

An identical question which has been referred to this court came up for consideration before a Division Bench of this court in the case of this assessee for the assessment year 1978-79. There the Division bench of the court by the judgment and order dated February 6, 1992 Commissioner of Income Tax Vs. Tribeni Tissues Ltd., answered the question in the affirmative and in favour of the assessee.

Following the said decision, we answer the question in this reference in the affirmative and in favour of the assessee.

There will be no order as to costs.

NURE ALAM CHOWDHURY J. - I agree.