Reference of debatable tax law questions allowed despite prior decision on computer allowances and investment allowance.

Debatable questions of law concerning extra-shift allowance on computers and investment allowance on data processing machines were held fit for reference under section 256(2) of the Income-tax Act, 1961. The prior decision cited by the High Court did not make the issues self-evident or incapable of reference, and the court was required to examine the questions on their merits when considering the reference application. The Revenue's application was therefore allowed, and the Tribunal was directed to refer the quoted questions to the High Court.

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Issues: Whether the Revenue's application under section 256(2) of the Income-tax Act, 1961, seeking reference of the two questions relating to extra-shift allowance on computers and investment allowance on data processing machines/computers, ought to be allowed.

Analysis: The questions proposed involved debatable issues of law. The High Court's view that the answers were self-evident was not accepted. The presence of a prior decision was not treated as rendering the questions incapable of reference; the High Court was required to consider the questions on their merits while making the reference.

Conclusion: The application for reference was allowed and the Tribunal was directed to refer the quoted questions to the High Court.

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