Commissioner of Income Tax vs Vickers Sperry of India Ltd.

U.T. Shah, J.—Both the parties stated that since the questions raised in this reference are covered by the decisions of this High Court as well as of the Supreme Court, the preparation of the paper book may be dispensed with and the reference be disposed of in the light of the said decisions.

This reference relates to the three assessment years, viz., assessment years 1973-74 to 1975-76, and there are certain common questions on certain issues.

For the assessment? year 1973-74 question No. 1 reads as under:

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the cash house rent allowance and the reimbursement of gas and electricity expenses to the employees should not be treated as perquisites for the purpose of the disallowance u/s 40A(5) of the Income Tax Act, 1961? "

Similar questions have been raised for the assessment years 1974-75 and 1975-76.

Both the parties agreed and stated that in view of the decision of this court in the case of Commissioner of Income Tax, Bombay City-II Vs. Indokem Private Ltd., , the answer should be given in favour of the assessee.

Following the aforesaid decision, we answer the question for each of these three years in the affirmative and in favour of the assessee.

Questions Nos. 2 to 4 taken up for the assessment year 1973-74 read as under:

"2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the deduction u/s 80J of the Income Tax Act, 1961, should be computed after taking into account only the totality of the assets in the industrial undertaking without deducting therefrom the debts and liabilities?

Whether, the Tribunal was right in interpreting the expression ''capital employed'' appearing in section 80J to denote only the total value of the assets of the undertaking?

Whether the Tribunal was justified in disregarding rule 19A(3) of the Income Tax Rules, 1962, in this regard? "

Similar questions have been referred in respect of the assessment year 1974-75.

Here also, both the parties agreed and stated that in view of the decision of the Supreme Court in the case of Lohia Machines Ltd. and Another Vs. Union of India (UOI) and Others, all the questions are to be answered in favour of the Revenue.

Following the aforesaid decision of the Supreme Court, we answer all the aforesaid three questions in favour of the Revenue and against the assessee.

No order as to costs.