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Bombay High CourtIndian Cases

Commissioner Of Income-Tax vs Rajesh Steel Industries on 20 November 1991

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Bombay High Court
Commissioner Of Income-Tax vs Rajesh Steel Industries on 20 November, 1991
Equivalent citations: [1995]211ITR548(BOM)
JUDGMENT

V.A. Mohta, J.

1. This is an application under section 256(2) of the Income-tax Act, 1961, by the Commissioner of Income-tax, Vidarbha, Nagpur, requiring the Tribunal to draw up a statement of case and to refer the following question said to be of law to this court, under section 256(1) of the Act :

“Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that unabsorbed depreciation in the hands of the partners for the assessment year 1976-77 is to be set-off against the income of the firm for the assessment year 1977-78 ?”
2. The Tribunal rejected the application on the ground that the issue is covered by the judgment of the Bombay High Court in the case of Ballarpur Collieries Co. v. CIT [1973] 92 ITR 219. The relevant assessment year in 1977-78. For the assessment year 1976-77, the assessee, Messrs. Rajesh Steel Industries, Nagpur (a partnership-firm), had returned a loss to the tune of Rs. 3,01,010. The Income-tax Officer computed the loss as returned which mainly consisted of unabsorbed depreciation and apportioned the said loss amongst the partners. For the assessment year 1977-78, the assessee claimed adjustment of unabsorbed brought forward losses inclusive of depreciation. The Income-tax Officer did not allow deduction in respect of unabsorbed depreciation in the hands of the partners pertaining to the assessment year 1976-77. The assessee thereafter filed an application under section 154 of the Income-tax contending that the unabsorbed depreciation in the hands of the partners for the assessment year 1976-77 amounting to Rs. 1,97,483 should be adjusted against the firm’s income for the assessment year 1977-78 in view of the aforesaid Bombay High Court decision in the case of Ballarpur Collieries [1973] 92 ITR 219. In the appeal preferred by the assessee, the Commissioner of Income-tax (Appeals) remitted the matter back to the Income-tax Officer with a direction to examine the issue in the light of the aforesaid decision. On a second appeal preferred by the Department against the remand order, the Tribunal came to the conclusion that there was no alternative to the Income-tax Officer than to allow the unabsorbed depreciation. The appeal of the Department was unsuccessful. The Department filed an application under section 256(1) on the ground that the Department had not accepted the correctness of the said decision and that a special leave petition had been filed before the Supreme Court against the said judgment.

3. We have heard Shri Chandurkar, learned standing counsel for the Department. He fairly brought to our notice a recent decision of the Supreme Court in the case of Garden Silk Weaving Factory v. CIT [1991] 189 ITR 512 recording approval to the aforesaid decision. Under the circumstances, we see no reason to entertain this application. It is dismissed without issuing notice.