COMMISSIONER OF INCOME TAX Vs. AGARWAL FASTNORS

JUDGEMENT

(1.) IN this reference under S. 256(2) of the IT Act, 1961, for the asst. yr. 1978-79 the following question of law has been referred to this Court :

(2.) THE facts relating to this reference are that for the asst. yr. 1978-79 it came to the notice of the CIT that the order of assessment year under reference on 11th March, 1981 by the ITO was erroneous inasmuch as he had allowed deduction under S. 80HH to the extent of Rs. 16,634 when the gross total income for the year was a negative figure and no deduction could have been made in terms of the provisions of S. 80A(2). The CIT further noticed that there was another error in allowing deduction under S. 80J to the extent of Rs. 890 in view of the gross loss. It was also found by him that apart from that in computing the deduction under S. 80J, the ITO has overlooked the provisions of S. 80J(1A). According to the CIT those errors resulted in allowing deduction and relief in excess of what was due under the provisions of law and as such, the order was clearly erroneous and prejudicial to the interests of Revenue.

(3.) THE Tribunal vide its order dt. 13th Sept., 1984 concluded the matter as hereunder :