The Commissioner Of Income Tax v. M/S. Borosil Glass Works

1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICGTION INCOME TAX REFERENCE NO. 690of 1987 The Commissioner of Income Tax ... Applicant. vs. M/s. Borosil Glass Works ..... Respondent Mr. Parag Vyas for Applicant. None for Respondent. CORAM: V. C. DAGA AND A. S. AGUIAR JJ.Date: 29[th] June, 2005. P. C.: 1. By this reference under section 256 (1) of the Income Tax Act ,1961, the Income Tax Appellate Tribunal has referred the followingquestions of law for the opinion of this court: 1. “Whether on the facts and circumstances of thecase, The Tribunal was right in law in holding that theamount of Rs.35,000/- being fees paid by the assesseefoar the valuation of plant and machinery was incidentalto business and allowable under section 37(1) of theIncome Tax Act, 1961? 2. “Whether on the facts and circumstances of the case,The Tribunal was right in law in holding that the ' jeep' isa heavy vehicle and thereby directing the Income TaxOfficer to allow the depreciation at 20% allowed by theIncome Tax Officer?” 3. Heard learned counsel for the applicant revenue. Perusedreference proceedings. reference proceedings. 4. The learned counsel for the revenue fairly drew our attention tothe instructions issued by the Central Board of Direct Taxes , NewDelhi, dated 27[th] March, 2000 wherein monetary limit for thedepartment for filing reference to the High Court earlier fixed forRs.50,000/- came to be revised and fresh instructions are issued bythe Board to file reference only in cases where tax effect exceedsRs.2,00,000/-.the instructions issued by the Central Board of Direct Taxes , NewDelhi, dated 27[th] March, 2000 wherein monetary limit for thedepartment for filing reference to the High Court earlier fixed forRs.50,000/- came to be revised and fresh instructions are issued bythe Board to file reference only in cases where tax effect exceedsRs.2,00,000/-. 5. This Court in the case of Commissioner of Income-tax v/s. CamcoColour Co., reported in ITR Vol. 254 (2002), page 565 ruled that theabove instructions are binding on the Department. Colour Co., reported in ITR Vol. 254 (2002), page 565 ruled that theabove instructions are binding on the Department. 6. The above instructions dated 27[th] March, 2000 reflects the policydecision taken by the Board not to raise questions of law where thetax effect is less than the amount prescribed in the instructions with aview to reduce litigation before High Courts and Supreme Court. Thecircular is binding on the Revenue. There is no justification toproceed with the decades old references having negligible tax effect. decision taken by the Board not to raise questions of law where thetax effect is less than the amount prescribed in the instructions with aview to reduce litigation before High Courts and Supreme Court. Thecircular is binding on the Revenue. There is no justification toproceed with the decades old references having negligible tax effect. 7. We, thus, do not think it necessary to answer the reference made tothis Court for the Assessment Year 1977-78. Accordingly,reference stands returned unanswered with no order as to costs. this Court for the Assessment Year 1977-78. Accordingly,reference stands returned unanswered with no order as to costs. (A. S. AGUIAR J.) (V. C. DAGA J. ) -x-