V. K. Singhal, J. - (1.) IN this application under Section 256(2) of the INcome-tax Act, 1961, the following question has been submitted : " Whether, on the facts and in the circumstances of the case, the INcome-tax Appellate Tribunal was justified in confirming the direction of the Commissioner of INcome-tax (Appeals) that the amount of 20% has to be calculated with reference to the profit and loss account of the assessee and deductions on account of depreciation, development rebate, investment allowance, adjustment on account of unabsorbed depreciation, additional depreciation, etc., are not to be adjusted at all and agreeing with the INcome-tax Officer in allowing deduction under Section 80 HH with reference to profit as per profit and loss account of the assessee ? They further erred in quashing the order passed by the Commissioner of INcome-tax for the assessment year 1980-81"
(2.) THE submission of learned counsel for the Revenue is that the Income-tax Appellate Tribunal was not justified in refusing to refer the above question on the ground that a similar question has already been referred and is pending for decision of this court. He has also drawn our attention to the decisions of their Lordships of the Supreme Court in the case of Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120 and CIT v. Kerala Solvent Extractions Ltd. [1987] 165 ITR 174 (Ker), wherein it has been held that 20% deduction under Section 80HH can be availed of after setting off unabsorbed depreciation and development rebate, etc. Without going into the merits of the case, we are of the opinion that the above question requires the interpretation of the provisions of Section 80HH of the Income-tax Act, 1961, and is a question of law. The Income-tax Appellate Tribunal was not justified in refusing to refer the said question on the ground that reference on the said point has already been made. The Income-tax Appellate Tribunal is directed to refer the question along with the statement of case within four months from the date of receipt of this order. No order as to costs.;