Section 84 relief reference declined as academic where statutory disqualification had to be tested at the undertaking's formation.

Entitlement to relief under section 84 of the Income-tax Act was not answered on the merits because the reference was treated as academic. The Court noted that the disqualification in section 84(2), read with the corresponding provision in section 15C of the 1922 Act, had to be tested at the time of formation of the undertaking. As the Tribunal had already found that the leasehold premises value was insignificant relative to total assets and below the statutory threshold in the Explanation, no further useful determination was required. The reference was therefore declined without pronouncing on the tax question.

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Issues: Whether the reference on entitlement to relief under section 84 of the Income-tax Act, 1961 required an answer on merits or should be declined as academic.

Analysis: The controversy turned on the scope of the disqualification in section 84(2) and its correspondence with section 15C of the Income-tax Act, 1922. A prior Division Bench decision on the same assessee had held that a building earlier used by another business could fall within the mischief of the provision, but the Tribunal had later found that the value of the leasehold premises used by the assessee was insignificant in relation to its total assets and below the statutory threshold reflected in the Explanation to section 84. In that setting, and because the relevant condition had to be assessed at the time of formation of the undertaking, the question was treated as not requiring a further answer.

Conclusion: The reference was declined as involving a purely academic question, and no answer was given on the merits of the entitlement to relief under section 84.

Final Conclusion: The references were disposed of without pronouncing on the referred tax question, as no useful purpose would be served by an answer.

Ratio Decidendi: A purely academic tax reference need not be answered where the dispute can be resolved by the existing factual findings and the statutory conditions are to be tested at the time of formation of the undertaking.

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