Skyline Industries (P.) Ltd. vs Commissioner of Income Tax

G.G. Sohani, Actg. C.J.

This is an application u/s 256(2) of the Income-''tax Act, 1961 (hereinafter referred to as "the Act").

The material facts giving rise to this application, briefly, are as follows : The assessee carries on a business in manufacture and sale of conductors. During the assessment years in question, the assessee received a credit note from Messrs. Hindustan Aluminium Corporation Limited towards refund of excess sales tax charged in earlier years. While framing the assessment for the assessment years in question, the assessee was asked to explain why the said amount be not taxed u/s 41(1) of the Act. The assessee contended that in pursuance of the agreement entered into with the M. P. Electricity Board, the said amount was payable by the assessee to the M. P. Electricity Board and, hence, could not be taxed u/s 41(1) of the Act. The Inspecting Assistant Commissioner rejected this contention and included the said amount in the income of the assessee. Aggrieved by the order passed by the Inspecting Assistant Commissioner, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) but that appeal was dismissed. The assessee filed a second appeal before the Tribunal and referred to the decision of this court in Miscellaneous Civil Case No. 40 of 1984 Commissioner of Income Tax Vs. Deora Pu Canbeon Mfg. Co. Pvt. Ltd., ) and contended that the High Court, in identical circumstances, had upheld a similar claim made by an assessee. The Tribunal, however, dismissed the appeal. The assessee thereupon submitted an application for rectification and contended that the Tribunal had committed an error apparent on the face of the record in not following the decision of this court in Commissioner of Income Tax Vs. Deora Pu Canbeon Mfg. Co. Pvt. Ltd., . The Tribunal, however, rejected that application. Aggrieved by the order passed by the Tribunal, the assessee sought reference but as the application submitted by the assessee in that behalf was rejected, the assessee has filed this application.

Having heard learned counsel for the parties, we have come to the conclusion that the following question of law does arise out of the order passed by the Tribunal :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in refusing to rectify the order dated June 6, 1985, passed by the Tribunal dismissing the appeal preferred by the assessee ?"

The application is, therefore, allowed. The Tribunal is directed to state the case and to refer the aforesaid question of law to this court for its opinion. In the circumstances of the case, parties Shall bear their own costs of this application.