Sanmati Forest Industries (P) Ltd. vs Commissioner of Income Tax

This is an application made at the instance of the assessee u/s 256(2) of the IT Act to answer the following question of law proposed by them

by this Court and to be called from the Tribunal consequent upon the dismissal of their application made u/s 256(1) of the Act by order dt. 29th

Jan., 1999 passed by Tribunal in RA No. 194/Ind/1998 arising out of ITA No. 39/Ind/1994 for asst. yr. 1989-90 :

Whether, in view of the facts of the case, the Hon''ble Tribunal was justified in setting aside the order of the CIT(A) and restoring that of AO in

respect of liability of tax u/s 115J of the IT Act, 1961 ?

Heard Shri M. Phadke, learned counsel for assessee, and Shri R.L. Jain, learned counsel for the Revenue.

At the outset, we may take note of the fact that the question proposed to be referred to this Court for answer was subject-matter of discussion

before their Lordship of Supreme Court in the case of M/s. Surana Steels Pvt. Ltd. Vs. The Deputy Commissioner of Income Tax and Ors, . It is

in this case, their Lordships examined the entire scheme of Section 115J in the context of Companies Act and in particular examined the scope of

Clause (iv) of Explanation appended to Section 115J. Their Lordships then interpreted the word ""loss includes depreciation"" while computing the

book profit of the assessee, whose cases are required to be assessed u/s 115J (since repealed). Their Lordships answered the reference in favour

of the Revenue and against the assessee.

In our opinion, once the law is settled by the authoritative pronouncement of the Supreme Court, nothing remains for this Court to decide except

to follow the law laid down by the highest Court in the country by virtue of Article 141 of the Constitution of India. It is for this reason we do not

wish to burden our judgment by narrating the entire facts having bearing over the question proposed to be referred to this Court for answer.

Accordingly and in view of the law laid down by the Supreme Court in the case of Surana Steel (supra) it is not necessary to allow this

application and call the question for answer on merits because the same stands already decided by the Supreme Court of India. In other words, it

is now no longer a referable question of law for being answered on merits by this Court u/s 256(1). When the whole controversy on the proposed

question is decided and settled for all time to come by the order of apex Court, there is neither any referable question that arises for consideration

nor any debatable question subsists. As a consequence the consequential orders if required may be passed by the AO in the light of the law laid

down by the Supreme Court in the case of Surana Steel (supra) in this case after affording an opportunity to the assessee. It is with these

observations this application is dismissed. No cost.