The Commissioner Of Income Tax v. M/S. Garware Motors & Engineers

1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICGTION INCOME TAX REFERENCE NO. 675of 1987 The Commissioner of Income Tax ... Applicant. vs. M/s. Garware Motors & Engineers ..... Respondent Dr. P. Daniel 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: “Whether on the facts and circumstances of the case,unabsorbed depreciation of Rs.1,31,468/- of M/s.Garware Plastics Pat. Ltd., (amalgamated company)could be set off against the income of M/s. GarwareMotors & Engineers Pvt. Ltd., (amalgamating company)for Assessment Year 1977-78?” 2. Heard learned counsel for the applicant revenue. Perusedreference proceedings. reference proceedings. 3. The learned counsel for the revenue fairly drew our attention to 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/-. 4. This Court in the case of Commissioner of Income-tax v/s. Camco Colour Co., reported in ITR Vol. 254 (2002), page 565 ruled that theabove instructions are binding on the Department. above instructions are binding on the Department. 5. 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. 6. We, thus, do not think it necessary to answer the reference made to this Court for the Assessment Year 1977-78. Accordingly,reference stands returned unanswered with no order as to costs. reference stands returned unanswered with no order as to costs. (A. S. AGUIAR J.) (V. C. DAGA J. ) -x-