Law: Income Tax Act, 1961

Section: 32,32A,256

(a) Income-tax-----Reference---Depreciation---Investment allowance---Actual-cost---Sub¬sidy---Tribunal was correct in holding that subsidy could not be deducted while computing actual cost of assets for purposes of depreciation and investment allowance ---No question of law arose---Indian Income Tax Act, 1961, Ss.32, 32A & 256. Dismissing the application for reference (i) that the Tribunal was right in law in holding that the subsidy received should not be, deducted from the cost of assets for the purpose of allowing depreciation and investment allowance. No question of law arose from its order. CIT v. P.J. Chemicals Ltd. (1994) 210 ITR 830 (SC) fol. (b) Income-tax--- ----Reference---Income from undisclosed sources---Additions on ground that there was discrepancy in stock shown in books of account and in statement made to Bank---Finding by Tribunal that there was no suppression of stock--¬Tribunal was justified in deleting additions---No question of law arose--¬Indian Income Tax Act, 1961, S.256. Tribunal noticed that the books of account had not been rejected by the Department as not representing the correct stock position. The Tribunal also found that the assessee had declared a higher quantity of closing stock to the bank, for the purpose of securing a loan. The Tribunal came to the conclusion that the closing stock declared in the return filed by the assessee was based on the books of account and it should be accepted rather than the closing stock as declared to the bank which was made for the purpose of securing a loan. The Tribunal was correct in deleting the addition of Rs.1,47,557 made by the Income-tax Officer to the income declared. No question of law arose from its order. Coimbatore Spinning and Weaving Co. Ltd. v. CIT (1974) 95 ITR 375 (Mad.) and CIT v. Ramakrishna Mills (Coimbatore) Ltd. (1974) 93 ITR 49 (Mad.) ref. JUDGMENT N. V. BALASUBRAMANIAN, J.---These are petitions filed by the Revenue under section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), to direct the Income-tax Appellate Tribunal to state a case and refer the following questions of law: "(1) Whether, on the facts and in the circumstances of the case,…

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