COMMISSIONER OF INCOME TAX Vs. NATIONAL RAYON COMMERCIAL COMPANY LIMITED

JUDGEMENT

(1.) THIS is an application for directing the Tribunal to refer to us for determination of the questions set out therein and to state a case for that purpose.

(2.) THE assessment years in question are the asst. yrs. 1973 -74, 1974 -75 and 1975 -76. It is not necessary to set out the questions in detail because the only two questions regarding which the rule has been issued is as to whether the plant and machinery installed in the tyre -cord project of the assessee -respondent is covered by item No. 20 of the Fifth Schedule to the IT Act, 1961, and as to whether the brokerage paid by the assessee should be allowed as a deduction. The questions, as framed, are as to whether the Tribunal was right in its decision in favour of the assessee on these questions. The assessee has produced before us the earlier order of the Tribunal on the same questions in respect of the asst. year 1972 -73 by way of an annexure to the affidavit of Trikkur Sitaram Narayanan, Secretary of the assessee -company, dt. 3rd Feb., 1984. The said affidavit has been taken on record by consent.

(3.) AS far as the question whether the tyre -cord can be said to be an "automobile ancillary" as contemplated by item No. 20 of the Fifth Schedule to the IT Act is concerned, we find that the Tribunal has considered the evidence before it and come to the conclusion that the tyre cord manufactured by the assessee is included in "automobile ancillaries" as contemplated by the said item No. 20. This decision appears to be essentially a decision based on appreciation of the factual evidence before the Tribunal. It appears that the Tribunal has, on the evidence before it, taken the view that, in a commercial sense, the tyre -cord manufactured by the assessee must be regarded as an automobile ancillary. It is not suggested before us that the Tribunal has come to this conclusion without evidence or that the conclusion is perverse. In fact, we find that in respect of the asst. yr. 1972 -73 an application for directing the said question to be referred to this Court for determination was rejected by the Tribunal. In view of this, we see no reason to direct the Tribunal to refer this question to us for determination. We find that our conclusion in this regard is supported by the decision of the Supreme Court in CIT vs. Nirlon Synthetic Fibres and Chemicals Ltd. (1981) 130 ITR 14.