- (1.) This Income Tax Reference under section 256 of the Income Tax Act, 1961 relating to the assessment year 1977-78, arises out of the order of the Income Tax Appellate Tribunal dated 21.12.1987 passed in I.T.A. Nos.1911 and 1961 (Alld.) of 1984. On an application by C.I.T., the Income Tax Appellate Tribunal, Allahabad Bench, Allahabad has referred the following questions of law for opinion of this Court. R.A. No.114(Alld.) of 1988 "Whether on the facts and in the circumstances of the case, the Tribunal was, in law, justified in deleting the addition of Rs.51,00,961/-out of the claim of Rs.123 lakhs under the head "expenses for transmission" ? R.A. No.115(Alld) of 1988 1] Whether on the facts and in the circumstances of the case, the Tribunal was, in law, justified in allowing Rs.40,25,052/- claimed by the assessee as written off amount for intangible assets ? 3] Whether on the facts and in the circumstances of the case, the Tribunal was, in law, justified in allowing Rs.23,00,000/- payment of interest made to the State Government out of fictitious assets? 4](a) Whether on the facts and in the circumstances of the case, the Tribunal was, in law, justified in allowing Rs.14,92,70,091 claimed by the assessee as amount capitalised out of revenue expenditure ? 4(b) Whether on the facts and in the circumstances of the case, the Tribunal was, in law, justified in confirming the order of the C.I.T.(A) reducing the amount out of capitalised expenditure of capital nature for the different distribution divisions of the assessee concern ?"
(2.) We have heard Sri Shambhu Chopra, learned Senior Standing Counsel appearing for the Income Tax Department and perused the record. No one appears on behalf of the respondent-assessee.
(3.) With regard to the question in R.A. No.114 (Alld.) of 1988, as reproduced above, Sri Shambhu Chopra submits that during the assessment year in question the assessee has claimed Rs. 1,23,00,000/- under the head "expenses for transmission" as against a sum of Rs.7,53,494/- disclosed under this head during the last year. He submits that steep rise in transmission expenses could not be properly explained by the assessee and thus, the disallowance of Rs.51,00,961/- was wholly justified. He referred to the findings of the Inspecting Assistant Commissioner in the Assessment order and in the findings recorded by the C.I.T. (Appeals ). He submits that the finding recorded by the Tribunal is wholly unjustified.;