Commissioner of Income Tax vs Dalmia Industries Ltd.

K. Shivashankar Bhat, J.—The revenue seeks a reference in respect of the two following questions : " 1. Whether, on the facts and in the circumstances of the case, the ITAT was correct in law in holding that the amount of Rs. 5,28,161 claimed as liability towards sales-tax was allowable despite the fact that the assessee had challenged the leviability of sales-tax by filing a writ petition before the Calcutta High Court ?

Whether, on the facts and in the circumstances of the case, the ITAT was correct in law in holding that the reimbursement of medical expenses cannot be treated as perquisite for the purpose of calculating disallowance u/s 40A(5) of the income tax Act ?"

The second question certainly does not call for any reference, in view of the two decisions of this Court in Commissioner of Income Tax Vs. Jay Engineering Works Ltd., and in Commissioner of Income Tax Vs. Shriram Refrigeration Industries Ltd., . 2. Regarding the first question, Mr. Rajendra, the learned counsel for the revenue, has urged that the question should be called for. According to the learned counsel, though prima facie, the said question also seems to be covered by the decision of this Court reported in Commissioner of Income Tax Vs. Dalmia Dairy Industries Ltd., , the basic fact was not correctly noted during the said year and, therefore, the question shall have to be offered and considered by the Court. The learned counsel also referred to a few decisions in support of his proposition that rejection of a reference in respect of one year will not bar a reference during the subsequent year, even though the question raised is similar or identical.

It is unnecessary to go into the applicability of this proposition in the instant case. We are of the view that the question is squarely covered by the aforesaid decision of this Court in Dalmia Dairy Industries Ltd''s case (supra). This Court has noted that right from the assessment year 1974-75 onwards the deduction was allowed by the Tribunal and that in respect of three years, namely, 1974-75, 1975-76 and 1977-78, reference applications were also rejected. The said decision pertains to the assessment year 1978-79. The Bench pointed out that the reference made to it was without referring to the earlier orders. Having regard to the decision of the Supreme Court in The Kedarnath Jute Mfg. Co. Ltd. Vs. The Commissioner of Income Tax, (Central), Calcutta, , this Court held that the sales tax liability was deductible because the notification in question was not stayed by the Calcutta High Court but only the fact of collection of the tax was stated. There is no difference between the facts of the earlier decision and the present case except regarding the figures. We do not think it appropriate that we should require the Tribunal to refer the said question once again to this Court.

It was stated that a SLP has been filed before the Supreme Court against the aforesaid decision of this Court. According to the learned counsel for the assessee, the assessee has not received any notice from the Supreme Court and obviously the Supreme Court has not granted special leave. Mr. Rajendra is not in a position to affirm that the Supreme Court has granted special leave. In the circumstances, we do not find any justification to call for a reference on that account also. If for any reason, the Supreme Court has granted special leave, certainly the revenue may approach the Supreme Court against the present order also. The application is, accordingly, rejected.