COMMISSIONER OF INCOME TAX vs TRAVANCORE CEMENTS LTD.

Om Prakash, C.J. & J.11. Koshy, J.

Assessment year 1985-86

income tax Act, 1961, s. 37(3A)

ORDER

J.B. KOSHY, J.:

At the instance of the Department the Tribunal referred the following question of law for the opinion of this Court under s. 256(1) of the IT Act, 1961:

''Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that "the repairs will not fall within the mischief of s. 3MA) of the IT Act, 196l?"

The assessee is a public limited company engaged in the production of white cement. For the asst. yr. 1985-86, the AO included the motor car expenses and repairs to cars in the aggregate expenses for the purpose of computing disallowance under s. 37(3A) of the IT Act. On appeal, CIT(A) held that repairs will not fall within the mischief of s. 37(3A) and allowed the claim of the assessee. The Tribunal also upheld the order of the CIT(A) following its earlier order in the assessee''s own case for the asst. yr. 1984-85.

It is contended by the senior standing counsel for the Department that in the year 1984-85 at the instance of, the Department an identical question was referred to this Court and in IT Ref. No. 83 of 1993 this Court by judgment dt. 6th Nov., 1996 reported as C1T vs. Tranvancore Cements Ltd. (1997) 138 CTR (Ker.) 521, answered the question in favour of the Revenue and against the assessee and the approach of the AO was upheld. Therefore, it is contended that this question also has to be answered in favour of the Revenue.

In IT Ref. No. 83 of 1993 (supra) a Bench of this Court followed the judgment dt. 2nd Sept., 1996, of the same Bench in Commissioner of Income Tax Vs. Navodaya, Another Division Bench judgment of this Court in Commissioner of Income Tax Vs. A.V. Thomas and Co. Ltd., took a contrary view and the above judgment dt. 10th Jan., 1997, is relied on by counsel for the assessee, Since the judgments pronounced by a Bench of this Court reported in Commissioner of Income Tax Vs. A.V. Thomas and Co. Ltd., and another Bench reported in Commissioner of Income Tax Vs. Navodaya, contain contrary views, in the matter of propriety we are of the opinion that the question of law referred in this case has to be considered and decided by a Full Bench of this Court. Therefore, the case is adjourned to be referred to a Full Bench.