The Commissioner Of Income Tax v. M/S. Cynamid India Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICGTION INCOME TAX REFERENCE NO. 174 of 1995 The Commissioner of Income Tax vs. ... Applicant. M/s. Cynamid India Ltd. ..... Respondent Mr. Parag Vyas for Applicant. Mr. Santosh Padamsholi for Respondent CORAM: V. C. DAGAAND A. S. AGUIAR JJ. Date: 10[th] August, 2005. P. C. : 1. By this reference arising out of I.T.A. No. 1244/Bom/1986, forAssessment Year 1981-82, under section 256(1) of the Income-tax Actthe Tribunal has referred the following question of law for opinion at theinstance of the Revenue: (1) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding thathusk is an agricultural product and consequently theassessee is entitled to deduction of Rs.4,98,015 under s.35C of the Income Tax Act , 1961. (2) Whether on the facts and in the circumstances of thecase, the Tribunal was justified in law in directing thesassessing officer to allow full deduction of initialcontribution to superannuation fund as revenue 2 expenditure? 1. Both counsel appearing for the rival parties agree that the abovequestions have been covered by decision of the Apex Court. Thefirst question is covered by the judgment in the case ofCommissioner of Income Tax vs. Cynamid India Ltd., reported in[1999] 237 ITR 585, wherein the Apex Court ruled that rice husk is aproduct of agriculture and consequently entitled to deduction undersection 35C of the Income Tax Act, 1961. 2. Similarly the second question is covered by the judgment in the caseof Commissioner of Income Tax vs. Sirpur Paper Mills , reportedin [1999] 237 ITR 41 (SC) where the Apex Court held that deductions of initial contribution to superannuation fund is allowable asrevenue expenditure. In this view of the matter both the questionsreferred to us is answered in the affirmative i.e. in favour of theassessee and against the Revenue. Reference accordinglydisposed of with no order as to costs. (V. C. DAGA J. ) -x- (A. S. AGUIAR J.)