COMMISSIONER OF INCOME TAX Vs. WINDSOR FOODS LIMITED

JUDGEMENT

(1.) THE Tribunal has referred the following three questions for the opinion of this Court under S. 256(1) of the IT Act, 1961 : At the instance of the Revenue :

(2.) THE assessee had claimed a weighted deduction under S. 35B of the Act on interest amount of Rs. 14,105 on packing credit. The ITO, however, rejected that claim for weighted deduction. In the appeal the CIT(A) also held that the additional liability of Rs. 80,414 that had arisen due to fluctuations in the foreign exchange rate, was relatable to the acquisition of the capital asset and hence, it was not allowable as a revenue item. As regard the alternative claim for investment allowance on the said additional liability, it was held that the basic condition laid down for availability of investment allowance was not satisfied in the said previous year because the relevant plant and machinery were installed and put to use long ago and it is only in that earlier previous year that the investment allowance was available to the assessee. The alternative plea was therefore, rejected. As regards weighted deduction under S. 35B on the amount of interest on packing credit (which was shown as Rs. 18,807 in the order of the ITO and the appellate order), the appellate authority held that the weighted deduction under S. 35B should be allowed on 25 per cent claimed on interest on packing credit.

(3.) AS regards the claim of deduction under S. 35B for interest on packing credit, the Tribunal following the earlier decision of the Tribunal in the case of Adydee Corporation, accepted the assessee's claim.