Court directs Income-tax Appellate Tribunal to refer questions on interest levied under section 216 and security deposits for cops.

The court partly allowed the petition and directed the Income-tax Appellate Tribunal to refer specific questions related to the levied interest under section 216 and the treatment of security deposits for cops. The petition was disposed of without any order as to costs.

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Issues:
1. Development rebate on machinery for manufacturing Nylon-6 yarn.
2. Depreciation on machinery installed at specific premises.
3. Computation of deficiency under section 80J(3) for certain assessment years.
4. Levying of interest under section 216 by the Income-tax Officer.
5. Treatment of security deposit for cops received by the assessee-company.
6. Addition made by the Income-tax Officer on account of excessive waste of yarn.

Analysis:

1. The court found that the question of allowing development rebate at a higher rate on machinery for Nylon-6 yarn production had been settled by previous Supreme Court decisions. Hence, no reference was necessary for this question.

2. The court noted that a similar question regarding depreciation was considered a question of fact by the Allahabad High Court previously. Consequently, no reference was required for this issue as well.

3. Since assessment proceedings for certain years were stayed by the Supreme Court, the court held that the computation of deficiency under section 80J(3) would only occur after those assessments were completed. Therefore, no direction was issued for this question.

4. The court addressed the issue of levying interest under section 216 by the Income-tax Officer. It was determined that the question of whether the underestimation was deliberate should be referred as it involved the interpretation of section 216.

5. Regarding the treatment of security deposits for cops received by the assessee-company, the court found that the question raised was indeed a question of law, contrary to the Tribunal's decision. Therefore, a reference was necessary for this issue.

6. The court concluded that the addition made by the Income-tax Officer on account of excessive waste of yarn was a factual finding by the Tribunal, not involving any legal principle. Hence, no reference was required for this question.

In the final decision, the court partly allowed the petition and directed the Income-tax Appellate Tribunal to refer two specific questions related to the levied interest under section 216 and the treatment of security deposits for cops. The petition was disposed of without any order as to costs.

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