V GURUVAIAH NAIDU Vs. CIT

JUDGEMENT

(1.) THE reference in T.C. No. 700/84 is placed before us to answer the following question : In view of the decisions of various High Courts, including this Court cited supra, whether this Court was correct in rendering its decision in V. Guruvaiah Naidu & Sons vs. CIT while interpreting the provisions of s. 35B(1)(b)(iii) of the IT Act, 1961 ? In T.C. No. 1490/85 the following question of law has been referred to this Court by the Appellate Tribunal for consideration and opinion of this Court. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the assessee is not entitled to weighted deduction under s. 35B(1)(iii) of the IT Act on the entire expenditure incurred by the assessee on packing materials, lorry freight, harbour dues, steamer freight and other incidental expenses ? So far as the claim of the assessee for weighted deduction with reference to packing materials is concerned it is covered against the assessee by a decision of this Court in this case of Vensimal & Sons vs. CIT and on the basis of the said decision, the assessee is not entitled to weighted deduction on packing materials. Since the other part of the question is the subject-matter of consideration before the Full Bench, this matter has also been placed before us for consideration. Learned counsel for the respondent submits that the decision of the Division Bench of this Court reported in "V. Guruvaiah Naidu & Sons vs. CIT (supra)" is held to be wrong and overruled by the Hon'ble Supreme Court and the controversy has already been set at rest by its order in CIT vs. Stepwell Industries Ltd. & Ors. In view of this, the reference in both the T.Cs. is answered accordingly.