Commissioner of Income Tax vs Travancore Cements Ltd.

J.B. Koshy, J.—At the instance of the Department, the Income Tax Appellate Tribunal referred the following question of law for the opinion of this court u/s 256(1) of the Income Tax 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 Section 37(3A) of the Income Tax Act, 19617"

The assessee which is a public limited company is engaged in the production of white cement. For the assessment year 1985-86, the Assessing Officer included the motor car expenses and repairs to cars in the aggregate expenses for the purpose of computing disallowance u/s 37(3A) of the Income Tax Act. On appeal, the Commissioner of Income Tax (Appeals) held that repairs will not fall within the mischief of Section 37(3A) and allowed the claim of the assessee. The Tribunal also upheld the order of the Commissioner of Income Tax (Appeals) following its earlier order in the assessee''s own case for the assessment year 1984-85.

It is contended by 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 I. T. R. No. 83 of 1993, this court by judgment dated November 6, 1996, answered the question in favour of the Revenue and against the assessee and the approach of the Assessing Officer was upheld. Therefore, it is contended that this question also has to be answered in favour of the Revenue.

In I. T. R. No. 83 of 1993 a Bench of this court followed the judgment dated September 2, 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 dated January 10, 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.