COMMISSIONER OF INCOME TAX Vs. DINESH MILLS LIMITED

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Ahmedabad Bench 'b' has referred the following question under Section 256 (1) of the Income Tax Act, 1961 (the Act) at the instance of the Commissioner of Income-tax:

(2.) THE Assessment Year is 1986-87. Assessment for the assessment year in question came to be framed vide assessment order dated 31. 03. 1989. The Commissioner of Income-tax, Baroda (the CIT) issued show cause notice under Section 263 of the Act on the following ground:

(3.) AFTER considering the submissions of the assessee the CIT came to the conclusion that the amount of Rs. 2,63,658/- should not have been allowed as a deduction while computing the total income of the assessee and hence, holding that the assessment was both erroneous and prejudicial to the interests of the Revenue, enhanced the assessment to the extent of Rs. 2,63,658/ -.