Commissioner of Income Tax vs Atlas Cycle Industries Ltd.

G.S. Singhvi, J.—On an application made by the Commissioner of Income Tax, Haryana, Rohtak, u/s 256(1) of the Income Tax Act, 1961 (for short, "the Act"), the Income Tax Appellate Tribunal, Delhi Bench "A", New Delhi (for short, "the Tribunal"), has, vide its order dated September 14, 1987, referred the following question of law for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal erred in law in affirming the order of the Commissioner of Income Tax (Appeals)/Appellate Assistant Commissioner holding that deductions allowed u/s 80G falling under Chapter VI-A of the Income Tax Act, 1961 could not be considered as sums ''not includible'' in the total income for Income Tax assessments and, therefore, would not fall for deduction under Rule 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 for the purpose of computing the capital employed ?"

We have heard learned counsel for the parties and perused the record. In our opinion, it is not necessary to dispose of the reference by recording a detailed order because the question similar to the one framed by the Tribunal in the present case has already been answered by the Supreme Court against the Revenue in Second Income Tax Officer and Another Vs. Stumpp Schuele and Somappa (P) Ltd., .

Shri D.S. Patwalia, learned counsel for the Revenue, fairly stated that the proposition laid down in the aforementioned judgment of the Supreme Court is squarely applicable to the present case.

We have carefully gone through the judgment of the Supreme Court. While answering a question similar to the one referred by the Tribunal in favour of the assessee, their Lordships of the Supreme Court approved the judgments of the various High Courts including two judgments of this court in Commissioner of Income Tax Vs. Oswal Woollen Mills Ltd., and Commissioner of Income Tax Vs. Avery Cycle Industries (P.) Ltd. (No. 1), .

In view of the above, the question referred by the Tribunal is answered against the Revenue and in favour of the assessee.

The reference is disposed of in the manner indicated above.