Commissioner of Income Tax, Delhi-I, New Delhi vs Triveni Engg. Works Ltd.

Madan B. Lokur, J.—The question of law that has been referred for our opinion u/s 256(1) of the income tax Act, 1961 reads as follows:- Whether the Tribunal was correct in law and on facts in confirming the view of the Commissioner of income tax (Appeals) that the molasses reserve fund did not constitute the income of the assessee get a deduction of Rs. 2,00,581?

The view taken by the Madras High Court in Commissioner of Income Tax Vs. New Horizon Sugar Mills Pvt. Ltd., , is that for the purpose of construction of Molasses Storage Tank an amount set apart by the assessee and placed in the Molasses Reserve Fund as required by the Molasses Control Order has to be excluded from its total income. 2. Against the decision of the Madras High Court an appeal was preferred by the revenue and was dismissed by the Supreme Court in Commissioner of Income Tax Vs. New Horizon Sugar Mills P. Ltd., We find no distinction in law in the case decided by the Madras High Court and the present case. Under the circumstances, we answer the question referred to us in the affirmative, in favour of the assessee and against the revenue.