COMMISSIONER OF INCOME TAX Vs. INDO CARPET FACTORY

JUDGEMENT

(1.) BY this reference under Section 256(1) of the Income-tax Act, 1961 ("the Act"), the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar ("the Tribunal"), has referred the following two questions of law to this court for opinion at the instance of the Revenue :

(2.) THIS reference pertains to the assessment year 1978-79. The assessee is a registered firm engaged in the business of manufacture, purchase and sale of carpets. The assessee also exports carpets outside the country. The head office of the assessee is at Srinagar. It has also a branch at Delhi. By this reference the Tribunal has referred two questions of law to this court for opinion. The controversy in the first question pertains to the right of appeal under Section 246(l)(c) of the Act against charge of interest under Section 139(8) and Section 217 of the Act. The Tribunal has held that the assessee can also challenge the leviability and quantum of interest charged under Section 139(8) and Section 217 of the Act. Aggrieved by the decision of the Tribunal, the Revenue applied for reference of question No. 1 to this court for opinion which the Tribunal has done. The controversy in the second question pertains to the allowability of weighted deduction in respect of certain items of expenditure. The Tribunal has allowed weighted deduction to the assessee in respect of the following items of expenditure :

(3.) THE ratio of the above decision would also apply to appeal against levy of interest under Section 217 of the Act.