COMMISSIONER OF INCOME TAX CENTRAL II Vs. SCHRADER SCOVILL DUNCAN LTD

JUDGEMENT

(1.) The question posed for our consideration in this reference under Section 256(1) of the I.T. Act, 1961, are as follows :

(2.) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that there was no error in the order of the Income-tax Officer in not reducing the capital computed proportionately having regard to the deductions allowed under Sections 80-I and 80J of the Income-tax Act, 1961, and in that view cancelling the order of the Commissioner of Income-tax under Section 18 of the Companies (Profits) Surtax Act?"

(3.) Being aggrieved by the order of the Commissioner, the assessee went up in appeal before the Income-tax Appellate Tribunal, The Appellate Tribunal considered the arguments advanced on behalf of the assessee as well as on behalf of the revenue and held that Rule 4 of the Second Schedule to the C.(P.) S.T. Act, 1964, applied only to those amounts which were not includible in the total income under the provisions of Chap. III of the I.T. Act and not to any of the deductions claimable or allowable under Chap. VI-A of the I.T. Act, 1961, and, therefore, there was no error in the order of the ITO in not reducing the capital computed proportionately, having regard to the deductions allowed under Sections 80-I and 80J and the order of the Commissioner on the basis of a contrary view taken by him was not correct. The appeal of the assessee was, therefore, allowed.