COMMISSIONER OF INCOME TAX Vs. PREMIER AUTOMOBILES LIMITED

JUDGEMENT

(1.) THIS is a cross reference at the instance of the Revenue and the assessee and relates to three assessment years, viz., 1970 71, 1971 72 and 1972 73. Under S. 256(1) of the IT Act, 1961, the Tribunal referred one question at the instance of the assessee and two questions at the instance of the Revenue. Consequent to the reference of second question at the instance of the Revenue, which is renumbered for the sake of convenience as question No. 3, the assessee wanted a further question to be referred and the same was also referred by the Tribunal which is numbered as question No.4. The questions so referred by the Tribunal are setout below:

(2.) AT the outset, it may be mentioned that it was agreed by the counsel for the parties that the questions referred to us at the instance of the Revenue, that is, questions Nos. 2 and 3 above, are covered by the decisions of this Court. So far as question No. 2 is concerned, it is covered by the decision of this Court in assessee's own case which is reported in Premier Automobiles Ltd. vs. CIT (1984) 41 CTR (Bom) 184 : (1984) 150 ITR 28 (Bom). The entire amount paid by the assessee for acquisition of drawings, blue prints, specifications, process sheets and technical data, etc., in respect of which depreciation has been allowed by the Tribunal in this case to the assessee, has been held in the above case to be revenue expenditure and allowed as a deduction in the computation of the income of assessee of the year in which the payment had been made. That being so, it is evident that assessee cannot get any depreciation on the very same amount which had been allowed as a revenue expenditure.

(3.) THE learned counsel for the assessee submitted before us that against the above decision of this Court in assessee's own case for the earlier year reported in (1984) 41 CTR (Bom) 184 : (1984) 150 ITR 29 (Bom) (supra), the Revenue has gone in appeal to the Supreme Court and, as such, this Court should give a direction that in the event of the decision of this Court being reversed, the assessee would be entitled to depreciation. We think that it is premature at this stage to give any such direction. In the event of the decision of this Court being reversed by Supreme Court, it is always open to the assessee to make suitable prayer before the Supreme Court for consequential orders. In that view of the matter, we are not inclined to give any such direction to meet the hypothetical situation that may arise in future in the event of reversal of the decision of this Court by the Supreme Court.