Commissioner of Income Tax vs Shriram Bearing Ltd.

Ajit Kumar Sengupta, J.—At the instance of the Commissioner of Income Tax and the assessee, the following questions of law have been referred to this court u/s 256(1) of the Income Tax Act, 1961 :

"Whether, on the facts and in the circumstances of the case and on a correct interpretation of the relevant provisions of the Income Tax Act, 1961, the Tribunal was correct in law in holding that setting off of the brought forward losses of the earlier years against the business profit of the current year u/s 72 of the Income Tax Act, 1961, was not a part of the process of computation of total income and that the deduction u/s 80-I of the said Act should be allowed to the assessee in respect of the profits of its priority industry with reference to its total income and gross total income, as they stood before the brought forward losses of the earlier years were set off against the positive profit of the current year u/s 72 of the Act ?"

Another question has been referred at the instance of the assessee u/s 256(1) of the Income Tax Act, 1961, which is as follows :

"Whether, on the facts and in the circumstances of the case and on a correct interpretation of the relevant provisions of the Income Tax Act, 1961, the Tribunal was correct in holding that the deduction of the un-absorbed depreciation or development rebate of the earlier years from the current year''s business income, u/s 32 or Section 33 and Section 34 of the Income Tax Act, 1961, was part of the computation of the total income and, therefore, the unabsorbed depreciation of Rs. 13,11,059 was deductible from the profits of the current year in computing the total income and also the gross total income of the assessee for the purpose of determining the deduction allowable u/s 80-I of the said Act in respect of the profits of the assessee from its priority industry ?"

It is not in dispute that the questions in this reference are concluded by the decision of this court in the case of Commissioner of Income Tax Vs. North Koshalpur Colliery Co. Pvt. Ltd., .

The question which was referred at the instance of the Commissioner of Income Tax must be answered in the negative and in favour of the Revenue and the question referred at the instance of the assessee in the reference is answered in the affirmative and in favour of the Revenue.

There will be no order as to costs.

K.M. Yusuf, J.

I agree.