Law: Income Tax Act, 1961

Section: 256

Income-tax-----Reference---Question of law---Question decided by High Court---Similar question may be referred---Indian Income Tax Act, 1961, S. 256. It cannot always be said that, in all cases, though a similar question of law has been answered in an earlier case in a particular way, an identical question of law, arising in a later case, would cease to be a referable one. It may be that the question of law formulated is one governed by a Bench decision of the High Court. Even so, unless it is demonstrated that the decision on the question of law formulated is merely academic, or governed by any decision rendered by the Privy Council or the Federal Court or the Supreme court of India, it continues to be a referable question of law. Madan (D. B.) v. CIT (1991) 192 ITR 344 (SC) fol. CIT v. Carborandum Universal Ltd. (1985) 156 ITR 1 (Mad.); Telu Ram Raunqi Ram v. CIT (1984) 146 ITR 401 (P & H) and CIT v. K.S.R.T.C. Pension and Gratuity Fund Trust (1987) 167 ITR 383 (Ker.) no longer good law. CIT v. Managing Trustee, Jalakhabai Trust (1967) 66 ITR 619 (SC) and CIT v. Relish Foods (1989) 180 ITR 454 (Ker.) ref. JUDGMENT K. S. PARIPOORNAN, J: --The Revenue is the petitioner in this batch of three cases. The original petitions are filed under section 256 (2) of the Income Tax Act, 1961. The same assessee--a private limited company--is the respondent in all these cases. The assessee received investment subsidy from the Central Government for setting up industries in backward areas. While completing the assessment for the years 1980-81, 1981-82 and 1982-83, the Income-tax Officer deducted the investment subsidy received by ,the assessee from the cost of assets for the purpose of computing depreciation, investment allowance, and the claim under section 80 J of the Income Tax Act. In the appeal, the Commissioner of Income-tax (Appeals) held that the above subsidy received should not be reckoned or taken into account for determining the actual cost under section 43(1) of the Income Tax Act, for the purpose of depreciation, investment allowance, etc. The Revenue filed appeals before the Income-tax Appellate Tribunal (in short, "the Tribunal"). The Tribunal followed its…

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