BIHAR STATE INDUSTRIAL DEVELOPMENT CORPORATION LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act, 1961, in relation to the assessment year 1967-68. The facts are that while assessing, the Income-tax Officer found that the income of the assessee came to Rs. 11,33,617 after giving effect to the order of the Appellate Assistant Commissioner. It was also found that there was a large amount of unabsorbed depreciation relating to the assessment years 1963-64 to 1966-67. Besides unabsorbed depreciation, there was also unabsorbed development rebate amounting to Rs. 9,85,528 pertaining to the assessment year 1964-65. The Income-tax Officer set off the unabsorbed depreciation to the extent of Rs. 11,33,370. The income thus came to "nil". The unabsorbed development rebate for the assessment year 1964-65 was carried forward. The assessee, being aggrieved by the refusal of grant of unabsorbed development rebate, filed an appeal. Before the appellate authority, the assessee contended that the unabsorbed development rebate should have been allowed in preference to the grant of unabsorbed depreciation. The submission of the assessee did not find favour with the Appellate Assistant Commissioner. The same contention was agitated before the Income-tax Appellate Tribunal as well with the same result. Thus, the Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal all held that in the matter of allowance, unabsorbed depreciation must take precedence over unabsorbed development rebate. The assessee, being aggrieved by the order of the Tribunal, filed an application for reference to this court. Hence, the present reference before us.

(2.) ON the facts mentioned above, the Tribunal has referred the following question for our opinion :

(3.) THE reference is answered accordingly. THEre shall be no order as to costs. Let a copy of this judgment be transmitted to the Assistant Registrar, Income-tax Appellate Tribunal, in terms of Section 260 of the Income-tax Act, 1961.