IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION INCOME TAX REFERENCE NO.70 OF 1988 INCOME TAX REFERENCE NO.70 OF 1988 INCOME TAX REFERENCE NO.70 OF 1988 The Commissioner of Income-tax ) Bombay City - III, Bombay. )..Applicant. V/s. Ramnord Research Laboratories P. ) Ltd., 77, Dr. Annie Besant Road, ) Worli, Mumbai - 400 018. )..Respondent. Mr.P.S.Sahadevan for applicant. Mr.Nilesh Joshi with Ms.Nikitha Narsena i/b. Dhru & Co. for respondent. CORAM : F.I.REBELLO CORAM : F.I.REBELLO CORAM : F.I.REBELLO AND AND AND J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. DATED : 3RD OCTOBER, 2007. DATED : 3RD OCTOBER, 2007. DATED : 3RD OCTOBER, 2007. ORAL JUDGMENT (PER J.P.DEVADHAR, J.) ORAL JUDGMENT (PER J.P.DEVADHAR, J.) ORAL JUDGMENT (PER J.P.DEVADHAR, J.) 1. In this cross reference the Income Tax Appellate Tribunal has forwarded two questions of law raised by the revenue and one question of law raised by the assessee for the opinion of this Court. The said questions relating to A.Y. 1978-79 and 1979-80 reads as under:- Questions at the instance of the revenue "1) Whether on the facts and in the circumstances of the case, the value of the stock of unsold raw films with the assessee is not assessable -= : 2 : =- as the income of the assessee either on the ground that the assessee had not received the permission to sell them or on the ground that the assessee could value them at cost, in accordance with its past practice, which was admittedly ‘nil’ ? 2) Whether on the facts and in the circumstances of the case, the limits laid down in section 40(c) or those laid down in section 40A(5) are applicable in case of Directors who are employed ? " Question at the instance of assessee. "Whether the Tribunal was not right in sustaining the addition of Rs.1,60,000/- in the assessment for 1978-79; Rs.1,40,000/- in the assessment for 1979-80 as income derived from extraction of silver from hypo solution after processing the film by making an estimate under the proviso to section 145 of the Income-tax Act, on the facts and in the circumstances of the case ? " 2. As regards the two questions forwarded at the instance of the revenue, Mr.Sahadevan, learned counsel appearing on behalf of the revenue submits that he is not pressing the said two questions in view of the fact that the tax effect in both the questions for both the years is less than Rs.4 lakhs. Accordingly, the two questions referred at the instance of the revenue are returned unanswered. 3. As regards the question forwarded at the instance of the assessee is concerned, counsel on both sides agree that the issue before the Tribunal was -= : 3 : =- whether in the facts and circumstances of the case, the C.I.T. (A) was justified in holding that the proviso to section 145 of the Income Tax Act, 1961 was applicable or not. Though the Tribunal has forwarded a statement of the case to that effect, on perusal of the order passed by the Tribunal it is seen that there is no specific finding recorded to that effect. In this view of the matter, counsel on both the sides agree that in the light of the Judgment of the Apex Court in the case of Salem Co-operative Central Bank Ltd. V/s. Salem Co-operative Central Bank Ltd. V/s. Salem Co-operative Central Bank Ltd. V/s. Commissioner of Income Tax Commissioner of Income Tax Commissioner of Income Tax reported in 201 I.T.R. 697 201 I.T.R. 697 201 I.T.R. 697, the order of the Tribunal be set aside and the matter be remanded back to the Tribunal for de novo consideration. 4. Accordingly, reference is returned unanswered by setting aside the order of the Tribunal; dated 29/9/1984 and remanding the matter back to the Tribunal for consideration on the issue raised before it in accordance with law. 5. Reference is disposed of accordingly. However, there will be no order as to costs. (F.I.REBELLO, J.) (F.I.REBELLO, J.) (F.I.REBELLO, J.) (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.) -= : 4 : =-