Ravalgaon Sugar Farm Limited v. Commissioner Of Income-tax

U.T. Shah, J.

1. These are two cross-references and the Tribunal has referred the following questions under section 256(1) of the Income Tax Act, 1961 :

At the instance of the Revenue :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the sum of Rs. 22,78,948 representing the provision made for extra payment of sugarcane price allowable deduction for the year under reference

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the additional liability of Rs. 5,64,978 as per the order dated January 28, 1978 of the Sugarcane Price Determination Board is not permissible deduction in computing the income for the assessment year 1973-74 "

At the instance of the assessee :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding the view that no appeal under section 246 of the Income Tax lies against charging of interest under section 217(1A) of the"

2. A similar question as the one raised by the Revenue in this reference had come up before this court in the Income Tax Reference had up before this court in the Income Tax Reference No. 438 of 1979. At that time, the Revenue had sought permission of this court to withdraw the reference in view of the subsequent circular issued by the Central Board of Direct Taxes.

3. The issue involved in the questions referred to us at the instance of the Revenue is covered in favour of the assessee by the circular issued by the Central Board of Direct Taxes which was brought to our notice while disposing of Income Tax Reference No. 438 of 1979. As per the said circular, the assessee would be entitled to the deduction of the two amounts involved. We are of the view that the questions raised by the Revenue are of academic interest only. In this view of the matter, we decline to answer these two questions.

4. As regards the issue raised in the question referred to us at the instance of the assessee, learned counsel for the assessee was fair enough to state that in view of the decision of the Supreme Court in the case of Central Province Manganese Ore Co. Ltd. v. CIT : [1986]160ITR961(SC) , he cannot possibly dispute the decision of the Tribunal. In this view of the matter, we answer the question in the affirmative, i.e., in favour of the Revenue and against the assessee.

5. No order as to costs.