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2001 PTD 2475

COMMISSIONER OF INCOME-TAX vs E. MERCK SERVICE AND AGENCIES

Citation2001 PTD 2475
CourtSupreme Court of India
Case No.Civil Appeal No.6169 of 1995
Date1999-03-17
Judge(s)S. P. Bharucha, R. C. Lahoti
ResultAppeal allowed

ORDER

1. The High Court at Bombay rejected the Revenue's Application under section 256(2) of the Income Tax Act, 1961. The questions to which the application pertained read thus: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee had claimed extra-shift allowance on computer only and not on data processing machines and computer is eligible for extra-shift allowance despite the fact that Appendix-I, III-C(3) of the Income Tax Rules, 1962, clearly prohibit granting extra-shift allowance on both the above items?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to investment allowance on data processing machine/computer even though the assessee is not engaged in any of the activities mentioned in section 32A(2) but only acts as indenting agent for foreign companies?"

2. The High Court referred to its decision in CIT v. I.B.M. World Trade Corporation (1981) 130 ITR 739 and observed that the answers to the questions were self-evident.

3. We have heard learned counsel and seen the judgment aforementioned. It seems to us that the questions of law certainly arise and they ought to be referred - to the High Court for a decision thereon. In rendering it, the High Court may take into consideration the judgment aforementioned but we do not think that it is correct to say that if furnishes a self-evident answer to the questions.

4. Accordingly, the appeal is allowed. The order under appeal is set aside. The application of the Revenue under section 256(2) is allowed. The Tribunal shall refer the questions quoted above to the High Court, having drawn up the requisite statement of case.

5. No order as to costs.

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