Binding precedent bars a reference where the depreciation issue on capital subsidy is already settled by prior High Court ruling

A reference under section 256(2) is not justified where the proposed question is already covered by binding High Court precedent. The document states that the issue concerned capital subsidy for computing deductible depreciation, but that controversy had been settled by an earlier Division Bench decision. Because the legal position was already concluded, calling for a case would be merely academic and futile, and the Tribunal would only be asked to restate an answer governed by existing law. The Revenue's applications were therefore rejected.

---

---

Issues: Whether a reference under section 256(2) of the Income-tax Act, 1961 should be directed when the proposed question is already concluded by binding precedent of the High Court.

Analysis: The proposed question concerned the treatment of capital subsidy received for purposes of computing deductible depreciation. The Court noted that the same issue had already been decided by a Division Bench in an earlier decision and that the controversy in these applications stood concluded by that settled law. In such circumstances, directing the Tribunal to state a case would serve no useful purpose, because the Court would only be recording an answer already governed by its prior ruling. A reference is not warranted where the issue is covered by binding precedent and the exercise would be merely academic or futile.

Conclusion: No case for calling for a reference under section 256(2) was made out, and the Revenue's applications were rejected.

---