COMMISSIONER OF INCOME TAX Vs. EVEREST COLD STORAGE

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue and the following question of law has been referred by the Tribunal for answer of this court :

(2.) THE brief facts giving rise to this reference are as follows: THE assessee is a partnership-firm deriving income from business of running a cold storage and ice factory. In the course of assessment proceedings, it claimed an investment allowance under Section 32A of the Act on the plant and machineries installed in the cold storage plant. This was allowed by the Income-tax Officer. THE assessee also claimed relief under Section 80J of the Act in respect of the cold storage. THE Income-tax Officer also allowed relief under Section 80f of the Act. Since there was not enough profit during the years under consideration for allowing the relief under Section 80J, the Income-tax Officer recorded a finding that the relief under Section 80J admissible to the assessee during the years under consideration shall be carried forward to be set-off against the profits of the future years. Subsequently, the Commissioner of Income-tax scrutinised the records and came to the conclusion that the Income-tax Officer had erred in his decision to the prejudice of the Revenue on both the points. THErefore, the Commissioner of Income-tax exercised the jurisdiction under Section 263 of the Act and issued a show-cause notice to the assessee. THE assessee appeared before the Commissioner and submitted that the Income-tax Officer had committed no error and there was no prejudice to the Revenue in the original assessment order. However, the Commissioner of Income-tax disagreeing with the contention raised by the assessee, passed an order under Section 263 of the Act on September 6, 1983, and directed a re-inspection in the matter by the Income-tax Officer. Aggrieved by this order, the assessee approached the Tribunal and the Tribunal reversed the finding of the Commissioner of Income-tax and held that the Income-tax Officer was right in granting reliefs to the assessee. Hence, the Revenue approached the Tribunal for making a reference to this court and as such the Tribunal has referred the aforesaid question for answer of this court.

(3.) THEREFORE, the finding given by the Tribunal is erroneous on the face of it and the view taken by the Commissioner of Income-tax is well-founded and he rightly exercised the jurisdiction under Section 263 of the Act for setting aside the order of assessment made by the Income-tax Officer and remanding the matter to the Income-tax Officer for fresh investigation.