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Commissioner of Income Tax v/s Jaipur Udyog Ltd.

    Income Tax Case No. 80 of 1977
    Decided On, 06 August 1979
    At, High Court of Rajasthan Jaipur Bench
    By, THE HONOURABLE CHIEF JUSTICE MR. CHAND MAL LODHA & THE HONOURABLE MR. JUSTICE N.M. KASLIWAL
    For the Appellant: L.R. Mehta, Advocate. For the Respondent: K.K. Jain, Advocate.


Judgment Text
C.M. Lodha, C.J.By this application u/s 256(2) of the Income Tax Act, 1961 (hereinafter to be referred to as " the Act "), the CIT, Jaipur, has prayed that the Income Tax Appellate Tribunal, Delhi Bench ' B ', may be directed to state a case and submit the following question of law set out in the application :" Whether, on the facts and in the circumstances of the case, the Tribunal was right in reopening and adjudicating on an issue u/s 254 of the Income Tax Act, 1961, which had become final through its earlier orders ? "2. The Tribunal refused to state the case by its order dated October 25, 1976 (Ex. 4), on the ground that no question of law arises out of the order of the Tribunal.3. We may now turn to the relevant facts of the case out of which this application arises. The assessee (respondent M/s. Jaipur Udyog Ltd., Sawai Madhopur), a limited company, manufactures cement and has its plant and machinery at Sawai Madhopur. In the assessment year 1954-55, the assessee claimed the cost of the plant and machinery at Rs. 1,76,50,917, but by its order dated November 4, 1972, the Tribunal determined the original cost at Rs. 11/2 crores. In respect of all the assessment years from 1955-56 to 1962-63, the Tribunal adhered to the finding given by it in the assessment year 1954-55 on the question of the cost of the plant and machinery. However, for the assessment year 1962-63, the assessee made an application for rectification of certain mistakes alleged to have occurred in the order of the Tribunal dated December 13, 1974 (Ex. 2). This application was allowed by the Tribunal by its order dated July 23, 1975 (Ex. 3) and the Tribunal ordered that cost of the plant and machinery should be read as Rs. 1,52,00,000 instead of Rs. 1,50,00,000. Aggrieved by this order of the Tribunal, the CIT submitted an application u/s 256(1) of the Act requiring the Tribunal to state a case and refer the question of law set out above. However, the Tribunal, by its order dated October 25, 1976 (Ex. 4), dismissed the application. Hence, this application u/s 256(2) of the Act.4. The application is being opposed by Shri K. K. Jain on behalf of the assessee on the ground that no question of law arises out of the Tribunal's order.5. The short question for our consideration at this stage is whether a question of law arises out of the Tribunal's order.6. The contention raised on behalf of the department is that for the assessment year 1954-55, the cost of the "packing plant" at Sawai Madhopur was estimated by the Tribunal at Rs. 4,00,000, after detailed consideration. This cost was arrived at on the basis of the letter dated June 7, 1961, received from M/s. F. L. Swidth & Co. Ltd. The assessee filed an application for rectification of certain alleged mistakes in the order of the Tribunal relating to the estimated cost of " packing plant ", but the Tribunal rejected the same. Similarly, for the assessment year 1962-63, the Tribunal rejected the assessee's pleas to recompute the cost of the plant. Thereupon, the assessee made an application for rectification and the Tribunal accepted the assessee's claim for the assessment year 1962-63 and directed that the cost of this item may be increased from Rs. 4,00,000 to Rs. 6,00,000 and the assessee may be allowed the necessary depreciation on that basis. It is urged that the Tribunal was not competent to rectify its appellate order in regard to this item. It is submitted on behalf of the CIT that the question whether the Tribunal was competent to rectify its appellate order in regard to the increase in the item of the cost of the plant in exercise of its powers u/s 254(1) of the Act arose from the order of the Tribunal and the Tribunal ought to have stated a case to the High Court. In support of his contention, learned counsel for the CIT has relied upon Commissioner of Income Tax, Bombay City I Vs. Bombay Dyeing and Manufacturing Co. Ltd., wherein it was held :" that the question of law whether the Tribunal was competent to rectify its appellate order in regard to the sum of Rs. 1,65,718, being the amount paid by the assessee as consultation fees, arose from the order of the Tribunal and that the Tribunal ought to state a case to the High Court thereon."7. In our opinion, the question submitted for reference is a question of law as it refers to the jurisdiction of the Tribunal u/s 254(1) of the Act. However, we are of the opinion that the question submitted for reference in the application is not properly framed and does not bring out the correct and exact point in controversy. Consequently, we have thought it fit to modify it.8. Acc

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ordingly, we allow this application and direct the Tribunal to state a case and submit the following question of law (as modified by us) arising out of its order to this court :" Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was competent to rectify its order dated December 13, 1974, in respect of assessment year 1962-63 in regard to increasing the cost of the plant of the assessee from Rs. 11/2 crores to Rs. 1,52,00,000 ? "9. There will be no order as to costs.
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