COMMISSIONER OF INCOME TAX Vs. HARDELIA CHEMICAL LIMITED

JUDGEMENT

(1.) BY this reference under S. 256(1) of the IT Act, 1961, made at the instance of the assessee (sic), the Tribunal has referred the following question of law to this Court for opinion :

(2.) THIS reference pertains to asst. year 1969 70. The material facts of the case are as under. The assessee owned a plant known as PAN. plant the value of which was Rs. 1,81,54,000. This plant also comprised of a PAN Reactor the value of which was Rs. 15,60,408. This PAN Reactor was destroyed by fire in the year 1973 relevant to the asst. year 1974 75. The assessee received compensation for the loss from the Untied Fire & General Insurance Co.

(3.) WE have carefully considered S. 34(3)(b) of the Act which provides that if any ship, machinery or plant is sold or otherwise transferred by the assessee to any personat any time before the expiry of eight years from the end of the previous year in which it was acquired or installed, any allowance made under S. 33 or under the corresponding provisions of the Indian IT Act, 1922, in respect of that ship, machinery or plant shall be deemed to have been wrongly made for the purposes of this Act and the provisions of Sub S. (5) of S. 155 shall apply accordingly. Sub s. (5) of s. 155, so far as is relevant, reads as under :