COMMISSIONER OF INCOME TAX Vs. HEREDILLA CHEMICALS LIMITED

JUDGEMENT

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

(2.) COUNSEL for parties are agreed that the first question is covered in favour of the Revenue by the decision of the Supreme Court in CIT vs. Alps Theatre (1967) 65 ITR 377 (SC) : TC 27R.145 and it may be answered accordingly. In view of the above, we answer question No. 1 in the negative and in favour of the Revenue.

(3.) WE have heard Mr. T.U. Khatri, learned counsel for the Revenue, who submits that the assessee is not entitled to deduction of the amount of Rs. 7,10,238 representing the cost of the PAN catalyst either as obsolescence allowance under S. 32(1)(iii) of the Act or as business expenditure. He, therefore, submits that the Tribunal committed manifest error of law in confirming the order of the CIT(A) and accepting the claim of the assessee for deduction of the value of the same from its income.