SUNIL AMBWANI, ADITYA NATH MITTAL, JJ. - (1.) THIS income tax appeal preferred by the Commissioner of Income Tax, Bareilly under Section 260 -A of the Income Tax Act, 1961 arises out of judgment and order dated 28.9.1999 passed by the Income Tax Appellate Tribunal in ITA No.4126/Del/93 relating to the assessment year 1990 -91.
(2.) THE appeal was admitted on 11.1.2007 on the questions of law as follows: - "1. Whether on the facts and circumstances of the case, the Tribunal was justified in law in upholding the order of CIT (A) who observed that the effect of higher claim of depreciation on the revalued assets to the extent of Rs.17,26,809/ - get set off against a like amount of Rs.17,26,809/ - transferred from the revaluation reserve and credited to the profit and loss account, while it is not so, and depreciation on revalued asset is not permissible for computation of income under Section 115J of Income Tax Act, 1961? 2. Whether on the facts and circumstances of the case, the Tribunal was justified in upholding the order of CIT (A) who directed to allow a reduction of Rs.17,29,809/ - within the meaning of Clause (1) read with proviso thereto of the Explanation to Section 115J which was already allowed by the A.O.?" We have heard Shri Dhananjay Awasthi, learned counsel appearing for the income tax department. Shri Rupesh Jain and Shri R.S. Agrawal appear for the respondent -assessee.
(3.) BRIEF facts necessary for deciding this appeal are that the assessee company is engaged in the manufacture and sale of Industrial alcohol; Indian made foreign liquor; and country liquor. The assessee company filed a return of income on 31.12.1990, showing Nil income after setting off carry forward loss of Rs.2,31,67,914/ -. The return was processed under Section 143 (1) (a) vide intimation dated 31.8.1991, following prima facie adjustment in the return income. The book profits under Section 115J of the Act was determined at Rs.81,26,600/ - and the tax was levied on the total adjusted income of Rs.81,26,600/ -.;