1957 (8) TMI 33

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....e sale of machinery under section 10(2) (vii) of the Income-tax Act. He also added a further sum of ₹ 15,882 as profits on the sale of stores. The assessment was affirmed on appeal by the Appellate Assistant Commissioner and also by the Income-tax Appellate Tribunal. At the instance of the petitioners the Tribunal stated a case to the High Court on the following two questions: "1. On the facts and in the circumstances of this case is the surplus of ₹ 13,05,144 arising out of the sale of plant and machinery of the sugar factory chargeable under section 10(2)(vii)? 2. Was the profit of ₹ 15,882 on the sale of stores of the factory taxable under the Income-tax Act in the circumstances of the case?" The first que....

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....ution should not be granted for quashing the order of the Commissioner of Income-tax and for directing him to deal with the claim of the petitioners in accordance with law. The main ground taken in support of the application is that under section 66(7) of the Income-tax Act the Commissioner was bound, as a matter of law, not only to order refund of the amount of tax paid in excess but also pay a reasonable amount of interest on the amount of tax paid in excess. The question at issue turns upon the construction of section 66(7) of the Income-tax Act which is in the following terms: "66(7) Notwithstanding that a reference has been made under this section to the High Court, income-tax shall be payable in accordance with the assessment ....