COMMISSIONER OF INCOME TAX Vs. BELPAHAR REFRACTORIES LTD.
LAWS(ORI)-1976-8-17
HIGH COURT OF ORISSA
Decided on
August 16,1976
COMMISSIONER OF INCOME TAX
Appellant
VERSUS
BELPAHAR REFRACTORIES LTD.
Respondents
Referred Judgements :-
PONDICHERRY RAILWAY CO. LTD. V. COMMISSIONER OF INCOME TAX [REFERRED TO]REGENT OIL CO. LTD. V. STRICK (INSPECTOR OF TAXES) [REFERRED TO]
ASSAM BENGAL CEMENT CO LIMITED VS. COMMR OF INCOME TAX WEST BENGAL [REFERRED TO]
GOTAN LIME SYNDICATE VS. COMMISSIONER OF INCOME TAX RAJASTHAN AND DELHI [REFERRED TO]
TRAVANCORE SUGARS AND CHEMICALS LIMITED VS. COMMISSIONER OF INCOME TAX KERALA [REFERRED TO]
COMMISSIONER OF INCOME TAX BOMBAY CITY 1 BOMBAY VS. CIBA OF INDIA LIMITED [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. RUPSA RICE MILL [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. SARADA BINDING WORKS [REFERRED TO]
BRITISH SUGAR MANUFACTURERS, LTD VS. HARRIS (INSPECTOR OF TAXES) [REFERRED TO]
JUDGEMENT
R.N. Misra, J. -
(1.)ON applications of the revenue made under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as " the Act") the Income -tax Appellate Tribunal, Bombay Bench, has stated these cases and referred the following questions for the opinion of the court:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting -
Rs. 3,08,012.(in assessment year 1962 -63)
Rs. 5,57,658 (in assessment year 1963 -64)
Rs. 5,79,336 (in assessment year 1964 -65)
Rs. 3,57,681 (in assessment year 1965 -66) and
Rs. 5,87,729 (in assessment year 1966 -67)
on the ground that the said capital expenditures were converted into revenue expenditures and if the said deletions were legal ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that it was not a case of sharing the net profit, but, on the other hand, it was a case of remuneration for specific services rendered ? "
(2.)IN regard to the assessment year 1963 -64, the following question has also been referred :
" Whether depreciation and development rebates were allowable to the assessee -company in respect of the technical know -how report ? "
Similarly, for the assessment year 1964 -65, one more question has also been referred being:
" Whether, on the facts and in the circumstances of the case, the Tribunal was justified in treating the contribution made to the two hospitals as expenditure of a revenue nature ? "
(3.)ASSESSEE is a public limited company by name Belpahar Refractories Ltd. with its registered office at Belpahar within this State. The company was born out of a collaboration agreement (hereafter referred to as " the agreement") dated November 6, 1957, between the Tata Iron and Steel Company Ltd. (hereafter referred to as " the TISCO "), the Tata Industries (Pvt.) Ltd. (hereafter referred to as " the TATAS ") and Didier Works A.G., a company incorporated in West Germany (hereinafter referred to as " the German Company"). During the material time the shareholdings in the assessee -company were in the following proportions :
(i) TISCO, TATAS and their associates ... 61%
(ii) Maharaja of Jeypore ... 28%
(iii) The German company ... 11%
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting -
Rs. 3,08,012.(in assessment year 1962 -63)
Rs. 5,57,658 (in assessment year 1963 -64)
Rs. 5,79,336 (in assessment year 1964 -65)
Rs. 3,57,681 (in assessment year 1965 -66) and
Rs. 5,87,729 (in assessment year 1966 -67)
on the ground that the said capital expenditures were converted into revenue expenditures and if the said deletions were legal ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that it was not a case of sharing the net profit, but, on the other hand, it was a case of remuneration for specific services rendered ? "
(2.)IN regard to the assessment year 1963 -64, the following question has also been referred :
" Whether depreciation and development rebates were allowable to the assessee -company in respect of the technical know -how report ? "
Similarly, for the assessment year 1964 -65, one more question has also been referred being:
" Whether, on the facts and in the circumstances of the case, the Tribunal was justified in treating the contribution made to the two hospitals as expenditure of a revenue nature ? "
(3.)ASSESSEE is a public limited company by name Belpahar Refractories Ltd. with its registered office at Belpahar within this State. The company was born out of a collaboration agreement (hereafter referred to as " the agreement") dated November 6, 1957, between the Tata Iron and Steel Company Ltd. (hereafter referred to as " the TISCO "), the Tata Industries (Pvt.) Ltd. (hereafter referred to as " the TATAS ") and Didier Works A.G., a company incorporated in West Germany (hereinafter referred to as " the German Company"). During the material time the shareholdings in the assessee -company were in the following proportions :
(i) TISCO, TATAS and their associates ... 61%
(ii) Maharaja of Jeypore ... 28%
(iii) The German company ... 11%
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