COMMISSIONER OF INCOME TAX Vs. INDIAN EXPLOSIVES LTD

JUDGEMENT

(1.) In this reference made at the instance of the Revenue, the following two questions have been referred by the Tribunal under Section 256(2) of the Income-tax Act, 1961, for the opinion of this court for the assessment year 1971-72 : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that a sum of Rs. 2,51,350 relating to the railway siding should be included in the computation of capital of the fertilizer project of the assessee for the purpose of arriving at deduction allowable under Section 80J of the Income-tax Act, 1961 ?

(2.) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the development rebate and depreciation were allowable in respect of Rs. 2,51,350 relating to the aforesaid railway siding ?"

(3.) The assessee appealed to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner held that the sum represented capital loss and that it was not an asset at all and could not be included in the capital. Therefore, he upheld the action of the Income-tax Officer, As regards the claim of development rebate/depreciation, the Appellate Assistant Commissioner held that the land had been transferred to the Railways and there was no asset owned by the assessee and consequently, he upheld the action of the Income-tax Officer.