Commissioner Of Income-Tax vs Om Inter Services (P.) Ltd.
1998 Latest Caselaw 609 Del

JUDGMENT

1. Learned counsel for the Revenue has made available a copy of letter dated May 8, 1986, issued by the Central Board of Direct Taxes granting approval under Section 80-O of the Income-tax Act, 1961, to the agreement dated November 2, 1983, which is in question. Clause 2 of the approval reads as under :

"2. The income allowable as a deduction for the assessment year 1981-82 and onwards would be the income computed after accounting for expenses incurred in earning such income, i.e., net income."

2. The document is taken on record.

3. The Income-tax Officer and the Commissioner of Income-tax (Appeals) recorded a finding of fact that the assessee had failed to disclose the expenses incurred in earning the income relevant to Section 80-O of the Act for the assessment year 1986-87 and, therefore, the net income could not be worked out and benefit of Section 80-O could not be allowed to the assessee. The Income-tax Appellate Tribunal has without reversing the finding of fact recorded by the two authorities below formed an opinion that benefit of Section 80-O could not be denied to the assessee and it was irrelevant whether the assessee had incurred any expenditure in that regard in the assessment year in question or might have accounted for the same in other assessment years.

4. In the above said background of the facts, we are of the opinion that the question which was sought to be referred by the Revenue does arise as a question of law from the order of the Tribunal and the Tribunal was not justified in rejecting the Department's application under Section 256 of the Income-tax Act.

5. For the foregoing reasons, the petition is allowed. The Tribunal is directed to draw up a statement of case and refer the following question of law for the opinion of the High Court :

"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in allowing the asses-see-company's claim under Section 80-O of the Income-tax Act ?"