- (1.) In these appeals preferred by the assessees against the decision of the Madras High court, the words "attributable to" occurring in S. 80-E/80-1 of the Income Tax Act fall for consideration. The following question was referred to the High court under Section 256 (1 of the Income Tax Act. "Whether on the facts and in the circumstances of the case, it has been rightly held that the assessee would be entitled to relief under S. 80-E and 80-1 of the Income Tax Act, 1961 for the Assessment Years 1966-67 and 1967-68 respectively on the income earned by it, from import and sale of spare parts from abroad -
(2.) The assessee is engaged in the business of manufacturing Ashok Leyland trucks and also spare parts of those vehicles. It was also importing the spare parts from abroad and selling the same to the persons who have purchased the trucks from it. As and when the manufacture of spare parts by the assessee increased, there was a corresponding reduction in the quantum of imports of spare parts. Some profit was earned by the assessee on the sale of spare parts also besides the profit accruing from the sale of vehicles. The volume of turnover and income relating to sale of spare parts is of course far smaller compared to the turnover and income arising from the sale of vehicles. The question is whether the assessee is entitled to relief under Section 80-E (for the Assessment Year 1966-67 and Section 80-1 (for the Assessment Year 1967-68 on the income earned by it from import and sale of spare parts. The Income Tax Officer took the view that the import and sale of spare parts is not attributable to the industry carried on by the assessee and, therefore, the income arising therefrom does not qualify for the benefit of S. 80-E/80-1. The tribunal, however, held in favour of the assessee whereupon the aforesaid question was referred to the High court at the instance of the Revenue. The High court has disagreed with the view taken by the tribunal and has answered the question in favour of the Revenue and against the assessee.
(3.) It is brought to our notice by the learned counsel for the appellant-assessee that for subsequent Assessment Years 1968-69 and 1969-70, anidentical reference was made under Section 256 and on this occasion the High court has answered the very same question, between the very same a parties, in favour of the assessee and against the Revenue following the decision of this court in Cambay Electric Supply Industrial Co. Ltd. v. Commissioner Of Income Tax. The later decision of the High court is reported in commissioner OF INCOME TAX v. Ashok Leyland Ltd. The learned counsel for the assessee commended the reasoning of the said decision for our acceptance.;