COMMISSIONER OF INCOME TAX Vs. SUDARSHAN PLYWOOD LTD

JUDGEMENT

(1.) BY this application under S. 256 (2) of the IT Act, 1961 ('the Act') , the CIT, North Eastern Region, Shillong, prayed for a direction to refer the question mentioned in paragraph 6 of the application for opinion of this Court.

(2.) RESPONDENT is a public limited company with its registered office at Tinsukia. The company filed income-tax return in the status of a company. In its return the assessee claimed deduction for investment under S. 32AB of the Act at the rate of 20 per cent of the total profit which included income of agricultural produced also. The AO disallowed the claim of the assessee and excluded that portion of the income which the assessee earned from agricultural produce. The AO passed order of assessment on 27th March, 1991,. The assessee preferred an appeal before the CIT (A). The CIT (A) after considering the conflicting decisions of various Courts held that the assessee was entitled to include the agricultural income of P&L a/c for calculation of deduction at the rate of 20 per cent of the total profit as allowable under S. 32AB. The CIT (A) , therefore, by his order dt. 30th July, 1991, allowed the said appeal in favour of the assessee. The Revenue filed a second appeal before the Tribunal, Gauhati Branch , Gauhati (IT Appeal No. 870 (Gau) of 1991) for the asst. yr. 1988-89. The Tribunal by order dt. 19th April, 1993 held that the agricultural income from sale of Eucalyptus wood was business income and although exempt from tax was to be considered as a part of business P&L a/c for computing the deduction allowable under S. 32AB. The Revenue, thereafter, filed an application under S. 256 (1) before the Tribunal, with a prayer to draw up a statement of the case and refer the same to this Court on the questions mentioned in paragraph 4 of this application. The Tribunal, however, declined to made the reference to this Court and reject the application filed by the petitioner. Hence, the present petition.

(3.) WE heard the learned counsels appearing on behalf of the parties. Mr. D.K. Talukdar, the learned counsel appearing on behalf of the Revenue submitted that the Tribunal ought to have referred the question to this Court for opinion. The learned counsel appearing on behalf of the assessee, on the other hand, contended that the Tribunal was justified in refusing to refer the question inasmuch as there was no referable question of law arising out of the order.