Siemens India Ltd. vs Commissioner of Income Tax

Dr. B.P. Saraf, J.—By this reference under s. 256(1) of the IT Act, 1961, made at the instance of the assessee, the Tribunal has referred the following three questions to this Court for opinion :

"1. On the facts and in the circumstances of the case, whether the Tribunal had jurisdiction in requiring the lower authorities to ascertain the method of accounting followed by the assessee in recording their liability for payment of pension in their books ?

Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the liability for payment of surtax is not an allowable deduction in computing the total income for Income Tax purposes ?

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the loss arising on account of the foreign remittances and revaluation of foreign liabilities to the extent it relates to acquisition of capital assets is capital expenditure ?"

Counsel for the parties are agreed that the question No. 2 is covered by the decision of this Court in Lubrizol India Ltd. Vs. Commissioner of Income Tax, . Following the same it is answered in the affirmative and in favour of Revenue.

It is also agreed by the counsel for the parties that question No. 3 is also covered in favour of the Revenue by the decision of this Court in Padamjee Pulp and Paper Mills Ltd. Vs. Commissioner of Income Tax, . Following the same, question No. 3 is also answered in the affirmative and in favour of the Revenue.

As desired by the learned counsel for the assessee, we make it clear that the Tribunal, while giving effect to the opinion given by us on question No. 3 may consider the question of depreciation, if raised by the assessee, in accordance with law.

So far as the question No. 1 is concerned, we find that the Tribunal has remanded the matter to the AAC for deciding the controversy afresh. Mr. Dastur, learned counsel for the assessee, submits that similar controversy in the case of the assessee came up for consideration before the Tribunal for the asst. yr. 1971-72 which has been decided by the Tribunal in favour of the assessee. He also stated that the above order of the Tribunal has been upheld by this Court in reference. Mr. Dastur further submits that in relation to the asst. yr. 1972-73 the application of the Revenue for reference under s. 256(2) also came to be rejected by this Court. He also stated that the AAC, in pursuance of the remand by the Tribunal, has not done anything as yet and the matter is lying where it was. He, therefore, submits that no fruitful purpose would be served after long lapse of 30 years if the matter is examined by the AAC instead of the Tribunal. The learned counsel for the Revenue Mr. Khatri also does not have any objection for grant of the prayer of the assessee that the matter be heard by the Tribunal instead of the AAC.

In view of the above stance of both the parties, we direct that the Tribunal may consider the controversy involved in question No. 1 in the light of its own orders in relation to asst. yrs. 1971-72 and 1972-73 and the orders of this Court on reference application in accordance with law after giving proper opportunity of hearing to both the parties.

In view of the above, we do not propose to answer question No. 1 referred to us. The Tribunal is directed to examine the controversy itself in the light of the above observations.

This reference is disposed of accordingly.

No order as to costs.