Court dismisses income-tax case, declines questions 1-3, finds value accepted for machinery, declines legislative reference.

The court dismissed the income-tax case without costs. The court declined to refer questions 1 to 3 as they were covered by a previous decision. For question 9, the court found that the machinery's value had been accepted by the Department, and depreciation had been calculated accordingly. Thus, the court concluded that the question for reference was not relevant. Regarding question 10, the court considered legislative changes and interpretations, including s. 40A, and declined to make a reference due to the new provisions regarding gratuity fund deductions.

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Issues involved: The Commissioner of Income-tax filed a petition u/s 256(2) of the I.T. Act requesting the court to direct the Income-tax Appellate Tribunal to make a reference on questions 1 to 3, 9, and 10.

Question 1-3: The court declined to refer questions 1 to 3 as they were covered by a previous decision in Income-tax Case No. 64 of 1982.

Question 9: The court noted that the machinery was purchased at the devaluation rate four years prior to the assessment order, and its value was accepted by the Department. Depreciation had been calculated based on the ascertained cost during these four years. Therefore, the court concluded that the question for reference could not arise now.

Question 10: The court referred to various decisions, including one by the Bombay High Court, regarding the deduction of payments towards an unapproved gratuity fund u/s 37 of the I.T. Act. Parliament introduced s. 40A, making payments to all gratuity funds ineligible for deduction except approved ones. The court declined to make a reference on this question, considering the legislative changes and interpretations.

Judgment: The court dismissed the income-tax case without costs.

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