Commissioner of Income Tax vs Suhrid Geigy Ltd.

S.B. Majmudar, J.—Four questions referred for our opinion by the Tribunal, Ahmedabad, the first two at the instance of the Revenue and the other two at the instance of the assessee, read as under :

At the instance of the Revenue

"(1) Whether, on the facts and in the circumstances of the case, the assessee made out its case for the allowance of development rebate under s. 34(3)(a) r/w s. 33 of the IT Act, 1961 for the assessment year in question ?

(2) Whether, the finding of the Tribunal that the disallowance of development rebate of Rs. 32,27,904 was not justified is correct in law and sustainable from material on record ?"

At the instance of the Assessee

"(3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding validity of reopening of assessment under s. 147(b) of the IT Act, 1961 ?

(4) Whether, the Tribunal was justified in not accepting contention of the assessee to the effect that the assessee had not utilised development rebate reserve and, hence, a formal transfer of the same to the general reserve account did not violate any conditions so as to warrant withdrawal of development rebate granted to the assessee ?"

So far as the first and second questions are concerned, they will have to be answered in favour of the assessee and against the Revenue as they are fully covered by our decision on question Nos. 1 and 2 in IT Ref. No. 8 of 1979 decided today [since reported as CIT vs. Karamchand Premchand (P.) Ltd. For the detailed reasons given therein for answering these questions, present questions are also answered in the affirmative, in favour of the assessee and against the Revenue.

That takes us to questions referred at the instance of the assessee. Question No. 3 is not pressed by the learned advocate for the assessee. It is, therefore, not answered. So far as question No. 4 is concerned, a typographical error is required to be corrected as suggested by learned advocates of both the sides. The corrected question will read as under :

"Whether the Tribunal was justified in not accepting contention of the assessee to the effect that the assessee had utilised development rebate reserve and, hence, a formal transfer of the same to the general reserve account did not violate any conditions so as to warrant withdrawal of development rebate granted to the assessee ?"

So far as this corrected question is concerned, it is fully covered by our answer to question No. 5 in IT Ref. No. 8 of 1979 (supra) decided today. For the detailed reasons given therein for answering this question in favour of the assessee the present corrected question No. 4 is also answered in the negative, in favour of the assessee and against the Revenue.

Reference disposed of accordingly, with no order as to costs.