IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 125 of 1986 For Approval and Signature: Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE D.A.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO ------------------------------------------------------------- SURAT DIST. CO.OP.SPINNING MILLS LTD. Versus COMMISSIONER OF INCOME TAX -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 125 of 1986 MR JP SHAH for Petitioner No. 1 MR MANISH R BHATT for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE D.A.MEHTA Date of decision: 10/07/2001 ORAL JUDGEMENT (Per : MR.JUSTICE A.R.DAVE) 1. At the instance of the assessee, the following three questions have been referred to this Court for its opinion under the provisions of Section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), by the Income Tax Appellate Tribunal, Ahmedabad Bench `B'. (i) "Whether on the Tribunal was right in holding that the case of Cloth Traders Co. (P) Ltd., 118 ITR 243 (Supreme Court) had no application because that case did refer to Sections 80M, 80K, 80MM and 80N but not touch Section 80J, while relying upon the earlier decision in the case of Cambay Electricity Co. Ltd. (115 I.T.R. 84) even though that case also did not touch Section 80J, but only referred to Section 80L?" (ii) "Whether, the Tribunal had erred in not holding that the gross total income included profits from the new industrial undertaking, the relief u/s. 80J has to be allowed first in preference to the order statutory deductions u/s. 35(2), 33 or 72?" (iii) "Whether the Tribunal was right in holding that the Commissioner of Income Tax had jurisdiction to initiate action u/s. 263 of the Income Tax Act, even though the impugned order of assessment was made a subject of appeal?" 2. We have heard learned advocate Shri Manish Shah appearing for the applicant-assessee and learned advocate Shri Bharat Naik for the respondent-assessee. 3. It has been fairly submitted by the learned advocates that during the pendency of the reference all the three questions have been answered by the Honourable Supreme Court. The first two questions have been answered by the Honourable Supreme Court in the case of Commissioner of Income Tax v. Kotagiri Industrial Co-operative Tea Factory Ltd., 224 ITR 604. Upon perusal of the said judgment and law laid down by the Honourable Supreme Court in the case of Commissioner of Income Tax v. Kotagiri Industrial Co-operative Tea Factory Ltd., we answer the first two questions in the affirmative i.e., in favour of the revenue and against the assessee. 4. So far as third question is concerned, it has also been answered by the Honourable Supreme Court in case of Commissioner of Income Tax v. Shri Arbuda Mills Ltd., 231 ITR 50. Looking to the law laid down by the Honourable Supreme Court in the said case, we answer the third question in the affirmative, i.e., in favour of the revenue and against the assessee. The reference stands disposed of accordingly with no order as to costs. 10.7.2001. (A.R. Dave, J.) (D.A. Mehta, J.) /phalguni/