COMMISSIONER OF INCOME TAX Vs. TATA CHEMICALS LIMITED

JUDGEMENT

(1.) IN this reference under section 256(1) of the Income -tax Act, 1961, three questions are raised. They read thus : '(1) Whether, on the facts and in the circumstances of the case, the assessee was entitled to depreciation on the interest and the foreign tour expenses, bank charges, etc., amount to Rs. 4,72,744 capitalised in earlier years, as reduced by the depreciation already allowed ? (2) Whether, on the facts and in the circumstances of the case, the assessee was entitled to relief under section 91 of the Income -tax Act, 1961, in respect of dividends from United Kingdom ? (3) Whether, on the facts and in the circumstances of the case, the sum of Rs. 8,65,208, being excise duty arising from the Government's notification could be allowed as deduction in the assessment year 1965 -66 ?'

(2.) COUNSEL are agreed that the first question must be answered in the affirmative in favour of the assessee in view of the judgment of the Supreme Court in Challapalli Sugars Ltd. v. CIT : [1975]98ITR167(SC) . The question is so answered without elaboration.

(3.) THE facts that are stated are pertinent to the third question. The assessment year involved in 1965 -66. The assessee follows the mercantile system of accounting. The assessee manufacturers soda ash. In the course of such manufacture, it produces carbon dioxide, also call kiln gas. It uses this carbon dioxide too make soda ash.