COMMISSIONER OF INCOME TAX Vs. JAWAHAR D DHOLAKIYA

JUDGEMENT

(1.) THE CIT, Rajkot has moved this Court by filing these three applications under S. 256(2) of the IT Act, 1961, (thereinafter referred to 'as the Act') as application under S. 256(1) of the Act preferred by the applicant before the Tribunal to draw up a statement of the case and to refer it to this Court along with the question of law based on facts, came to be rejected. The Tribunal was requested to refer the following question :

(2.) ASSESSEE at the relevant time was a Development Officer in Life Insurance Corporation and was drawing incentive bonus. The Assessing Officer (AO) applied his mind to the question of claim of deduction from incentive bonus and thereafter he has come to the conclusion that deduction is permissible, allowed the same and assessed accordingly. It is also clear from the record that for asst. yrs. 1981 82 and 1982 83 such claim being rejected by the AO, in appeals, contentions of the assessee were upheld by the CIT(A). These orders were challenged by the Department before the Tribunal and the Tribunal upheld the claim of the assessee. Decisions of Tribunal were pointed out to show that deduction is permissible. Over and above these decisions, AO allowed the claim keeping in mind the instruction of CIT contained in his letter dt. 1st Dec., 1986 bearing No. RR/GC/86 87.

(3.) THE assessee preferred three appeals before the CIT(A) II, Rajkot and pointed out that AO, for deciding the issue before him, considered earlier orders and decisions of the Tribunal and came to a definite finding and allowed the deduction claimed by the assessee. The AO has not at all collected "information" from any source. By a common order dt. 9th Aug., 1989, the appellate authority allowed the appeals. In paragraph 12 of the order, the appellate authority held as under :