Reference of questions of law on investment allowance for cold storage plant allowed where precedent and section 154 were in issue.

The HC held that the Tribunal was required to state two questions of law under section 256(2) of the Income-tax Act, 1961, because both arose from its order. The reference dispute concerned whether section 154 could be invoked in relation to the allowability of investment allowance for a cold storage plant, and whether the issue was already governed by binding precedent. The Court also treated the Supreme Court ruling as a declaration of law under article 141 of the Constitution, making section 154 inapplicable on that basis. The application for reference was allowed and the Tribunal was directed to refer the questions.

---

---

Issues: Whether the Tribunal was required to state two questions of law under section 256(2) of the Income-tax Act, 1961, arising from the Tribunal's order concerning the applicability of section 154 and the allowability of investment allowance to a cold storage plant.

Analysis: The Court found that the two proposed questions of law did arise from the Tribunal's order. The dispute centred on whether the issue of investment allowance for cold storage was already settled by binding precedent and whether the Supreme Court's decision amounted to a declaration of law under article 141 of the Constitution of India, making section 154 inapplicable. On that basis, the application for reference was allowed and the Tribunal was directed to state the questions.

Conclusion: The application was allowed and the Tribunal was directed to refer the two questions under section 256(2) of the Income-tax Act, 1961.

---