BHAGHEERATHA ENGINEERING LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is an application by the assessee under S.256 (2) of the Income Tax Act seeking for a direction to the Income Tax Appellate Tribunal Cochin Bench to refer to the following questions:

(2.) The facts which are necessary for the disposal of this application are narrated below: The petitioner is a company known as 'M/s Bhageeratha Engineering Ltd.' engaged in civil construction of dams, structural engineering and other related activities. For the assessment year 1985-86, the assessee company claimed investment allowance of Rs. 16,04,864 in respect of plant and machinery used for the purpose of its business newly installed. The case of the assessee is that the investment allowance was allowed by the Commissioner of Income Tax in the appeals relating to earlier years. The assessing officer, however denied the claim on the ground that the Revenue has filed further appeal before the Tribunal against the order of the Commissioner. On appeal, the Commissioner of Income Tax (Appeals) allowed the claim of the assessee following the order of the Tribunal for the assessment years 1980-81 and 1981-82 in I.T.A. Nos. 220 and 221/Coch/85, dated 30th January 1987. As against the said order, the Revenue filed appeal before the Income Tax Appellate Tribunal. In the said appeal, the order of the Commissioner of Income Tax (Appeals) was upheld by the Tribunal as per the order dated 6rh October 1993. Later, the Revenue filed Miscellaneous Application No. 4/Coch/94 for rectification of the order passed by the Tribunal. In that application, the Tribunal found that in view of the judgment of the Supreme Court in C.LT. v. N.C. Budharaja and Co. (1993) 204 I.T.R. 412 the assessee is not entitled to deduction of investment allowance for the assessment year 1985/86. Therefore, by the order dated 8th August 1994 the Tribunal re-called its order in I.T.A. No. 511/Coch/89 for the assessment year 1985/86 in so far as it relates to the issue of investment allowance. The result is the investment allowance granted to the assessee was withdrawn. The assessee thereafter filed the application under S.256(1) of the Income Tax Act. The said application was disallowed by the tribunal by the order dated 1.7th August 1995. The present application for compelling reference is in pursuance of the said order.

(3.) Heard the learned counsel for the assessee and the Standing Counsel for the revenue.