Law: Income Tax Act, 1961

Section: 33(1)(b)(B),(i)(a)

Income-tax--- Question of fact-Reference--Whether Nylon 6 is a "petrochemical" in terms of entry, held, a question of fact-Calling for a reference by High Court on such question, not proper. C. I. T. v. Nirton Synthetic Fibres and Chemicals Ltd. (1981) 130 I T R 14 (S C) ref. JUDGMENT R. S. PATHAK, J.-The delay in filing the special leave petition is condoned. Having regard to questions raised by the special leave petition, special leave to appeal is granted. 2. The appellant is a limited company engaged in the manufacture of Nylon-6 yarn from imported caprolactum. In the assessment proceedings under the I. T. Act, 1961, for the assessment year 1968-69, the appellant claimed that Nylon-6 was an article covered by item 18 of the Fifth and Sixth Schedules of the Act and, therefore, it was entitled to development rebate at 35% under section 33(1) (b) (B), (i) (a) and for deduction, in term of sec­tion 80-1, from the profits and gains attributable to a priority industry. The appellant claimed that Nylon-6 fell within the scope of the entry "Petrochemicals including corresponding products manufactured from other basic raw materials like calcium-carbide, ethyl alcohol or hydro. carbons from other sources." 3. The claim was allowed by the I. T. O. When completing the assess. men! for the assessment year 1970-71, the I. T. O. took a different view of the claim and referred the case to the Additional Commissioner under section 263 of the Act. Thus apprised, the Additional Commissioner invoked his revisional powers in respect of the assessment order for the assessment year 1968-69 and, notwithstanding the evidentiary material placed before him by the appellant, rejected the claim of the appellant, holding that the manufactured Nylon-6 was not covered by the entry. 4. The appellant appealed to the I. T. Appellate Tribunal. The Appellate Tribunal allowed tire appeal and inter alia, found that Nylon-6 produced by the appellant qualified as a "petrochemical". The Commissioner applied to the Appellate Tribunal for a reference to the High Court but the reference application was rejected on the ground that no question of law arose in the matter. 5. The Commissioner applied to…

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