COMMISSIONER OF INCOME TAX Vs. PRINTERS HOUSE

JUDGEMENT

(1.) THIS is a reference under S. 256(1) of the IT Act, 1961, seeking the opinion of the High Court on the following question of law arising out of the asst. year 1975 -76 :

(2.) THE assessee is a private limited company carrying on business of supply of imported high speed rotary machines on its own account and as commission agent. In the relevant accounting year, the assessee had imported two machines, namely, (i) Web offset machine imported in June, 1974, for Rs. 5,82,010, and (ii) Repida machine imported in April, 1974, from West Germany for Rs. 2,38,972. The assessee claimed deduction under S. 35 of the Act. The ITO accepted the claim of the assessee in respect of machine No. (i) on the ground that the same was imported for scientific research but disallowed similar claim in respect of machine No. (ii).

(3.) TO the extent of the claim of the assessee having been disallowed in respect of machine No. (ii), the assessee carried the matter to the CIT(A). While the assessee's appeal was pending before the CIT(A), the CIT, Delhi -I, initiated proceedings under S. 263 of the IT Act for withdrawal of deduction under S. 35 in respect of machine No. (i). Vide order dt. 19th Feb., 1980, the CIT(A) allowed the assessee's claim in respect of machine No. (ii). On 21st Feb., 1980, the CIT, Delhi -I, passed an order under S. 263 setting aside the assessment order and directing the ITO to refer the assessee's claim under S. 35 in respect of both the machines to the prescribed authority under s. 35(3). However, on 22nd March, 1980, the CIT, Delhi -I, passed another order under S. 154 of the Act limiting his order dt. 21st Feb., 1980, to machine No. (i) alone.