Commissioner Of Income-Tax - Applicant(S v. Shree Shantinath Silk Ind. - Respondent(S

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No.18 of 1998 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA Sd/- HONOURABLE MR.JUSTICE Z.K.SAIYED Sd/- ===================================================== 1[Whether Reporters of Local Papers may ]NObe allowed to see the judgment ?2 To be referred to the Reporter or not ?NO3[Whether their Lordships wish to see the ]NOfair copy of the judgment ?Whetherthiscaseinvolvesa substantial question of law as to the 4interpretation of the constitution of NOIndia, 1950 or any order made thereunder ?5[Whether it is to be circulated to the ]NOcivil judge ? ===================================================== COMMISSIONER OF INCOME-TAX - Applicant(s) Versus SHREE SHANTINATH SILK IND. - Respondent(s) =====================================================Appearance : MR MANISH R BHATT for Applicant(s) : 1,MR NR DIVETIA for Respondent(s) : 1,MR SN DIVATIA for Respondent(s) : 1, ===================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 15/04/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA) (1)The following two questions have been referred under Section 256(2) of the Income-tax Act, 1961 (the Act), at the instance of the revenue: 1. Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was right in holding that by crediting the partners capital account by the amount standing to the credit of the investment allowances reserves account does not result in distribution by way of profits of such reserves in a case where assessee has utilised the amount credited to the investment allowance reserves amount for the purpose of acquiring new machinery and plant for the purposes of the business of the undertaking?Hon'ble ITAT was right in holding that by crediting the partners capital account by the amount standing to the credit of the investment allowances reserves account does not result in distribution by way of profits of such reserves in a case where assessee has utilised the amount credited to the investment allowance reserves amount for the purpose of acquiring new machinery and plant for the purposes of the business of the undertaking? 2.Whether on the facts and circumstances of the case and in law, the tribunal was right in holding that if out of three conditions as prescribed by the provisions of Sec. 32A(5), if one condition in sub clause (b) is satisfied and the other two conditions as mentioned in sub clause (a) and (c) are not satisfied even then in that case the provisions of Sec. 155(4)(A) will not be applicable.the case and in law, the tribunal was right in holding that if out of three conditions as prescribed by the provisions of Sec. 32A(5), if one condition in sub clause (b) is satisfied and the other two conditions as mentioned in sub clause (a) and (c) are not satisfied even then in that case the provisions of Sec. 155(4)(A) will not be applicable. (2)The Assessment Years are 1981-82 to 1983-84 and 1985-86. It is an admitted ground between the parties that the controversy stands concluded by a decision of this Court in the case of Commissioner of Income Tax Vs. Shree Shantinath1985-86. It is an admitted ground between the parties that the controversy stands concluded by a decision of this Court in the case of Commissioner of Income Tax Vs. Shree Shantinath Silk Mills, Income Tax Reference No.50 of 1997, decided on 26.02.2008. Hence, the facts and contentions are not narrated in detail. (2)The Assessment Years are 1981-82 to 1983-84 and 1985-86. It is an admitted ground between the parties that the controversy stands concluded by a decision of this Court in the case of Commissioner of Income Tax Vs. Shree Shantinath1985-86. It is an admitted ground between the parties that the controversy stands concluded by a decision of this Court in the case of Commissioner of Income Tax Vs. Shree Shantinath Silk Mills, Income Tax Reference No.50 of 1997, decided on 26.02.2008. Hence, the facts and contentions are not narrated in detail. (3)For the reasons stated in the judgment rendered on 26.02.2008 in the case of CIT Vs. Shree Shantinath Silk Mills (supra), in Income Tax Reference No.50 of 1997, both the questions are answered in the affirmative i.e. in favour of the assessee and against the revenue.on 26.02.2008 in the case of CIT Vs. Shree Shantinath Silk Mills (supra), in Income Tax Reference No.50 of 1997, both the questions are answered in the affirmative i.e. in favour of the assessee and against the revenue. (4)The reference stands disposed of accordingly. There shall be no order as to costs. There shall be no order as to costs. Bhavesh* *** Sd/- [ D.A. MEHTA, J ]Sd/- [Z.K. SAIYED, J ]