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

JUDGEMENT

(1.) THIS is a reference under S. 256(1) of the INCOME TAX ACT, 1961,in relation to the asst. year 1967 -68. The facts are that while assessing, the ITO found that the income of the assessee came to Rs. 11,33,617 after giving effect to the order of the AAC. It was also found that there was a large amount of unabsorbed depreciation relating to the asst. yrs. 1963 -64 to 1966 -67. Besides unabsorbed depreciation, there was also unabsorbed development rebate amounting to Rs. 9,85,528 pertaining to the asst. year 1964 -65. The ITO 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 asst. 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 AAC. The same contention was agitated before the Tribunal as well with the same result. Thus, the ITO, the AAC 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.) NO decision of any Court has come to light taking a view contrary to the view taken by the Kerala, Mysore, Gujarat and Madras High Courts and ourselves.