TaxTMI 
TaxTMI 
1990 (11) TMI 65
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....d in a negative figure, no deduction under section 80HH was admissible. Therefore, he rejected the claim of the assessee. On appeal, the Commissioner of Income-tax (Appeals) held that the receipts on sale of import licences were revenue receipts and as such there was no question of relief under section 80HH on such receipts. To come to that conclusion, he followed the order of the Tribunal in the earlier year in the case of the assessee itself. On appeal filed against the order of the Commissioner, the Tribunal, following its earlier order dated January 7, 1981, in 1. T. A. Nos. 190 and 191 /Bang of 1979, upheld the order of the Commissioner and dismissed the appeal. Therefore, it referred the question extracted above for answer by this court. In the case of Sterling Foods v. CIT [1984] 150 ITR 292, this court, on identical facts and circumstances, ruled as follows (headnote) : "(i) that the amount received by an assessee by the sale of import entitlements is business income and not capital proceeds and that income must be included in the total income of the assessee under section 5 of the Act. The total income of any previous year of the assessee includes income from whateve....
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....ase. For that proposition, he placed reliance on the decision of the Supreme Court in the case of Chatturam Horilram Ltd. v. CIT [1955] 27 ITR 709. A Bench of four judges of that court had occasion to consider the nature and scope of the jurisdiction exercised by the High Court in a referred case arising under the Indian Income-tax Act, 1922. The facts of that case were as follows : The assessee company carried on business in Chota Nagpur and it was assessed to tax for the year 1939-40. That assessment came to be set aside by the Income-tax Appellate Tribunal on March 28, 1942, on the ground that the Indian Finance Act, 1939, was not in force during the assessment year 1939-40 in Chota Nagpur which was a partially excluded area. On reference under section 66, the High Court agreed with the view of the Appellate Tribunal by its judgment dated September 30, 1943. On June 30, 1942, Bihar Regulation IV of 1942 was promulgated by which the Indian Finance Act of 1939 was brought into force in Chota Nagpur retrospectively from March 30, 1939. The Income-tax Officer thereupon passed an order on February 8, 1944, to the effect that the income of the assessee for the year 1939-40 has esca....
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....hand, as we see it, this court, in the earlier case of the assessee, on identical facts, answered the question posed, having regard to law as it then stood. We have already extracted what was decided by this court. It cannot be said that that decision is incorrect. What has happened is that that decision as a binding precedent is of little value in the light of amendments made to section 28 retrospectively. If it is not binding on us, then at the time we are called upon to answer a question for the subsequent assessment year, we must look at the law as it was at the relevant time that is relevant for the assessment year 1979-80. Both the amendments have been effective from 1962-63 and therefore, in 1979-80, the income received from the Government of India by sale of import licences and incentives for export was income within the meaning of section 28 assessable to tax as income from profits and gains of business or profession. It is in that light that we have to answer the question. We are fully supported in the view we have taken by the decision of the Supreme Court in the case of CIT v. Straw Products Ltd. [1966] 60 ITR 156 which dealt with a similar situation in the following te....
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....Court to decide the question in the light of the law as amended or if it necessitates investigation of facts which have not been investigated, the High Court may refuse to answer the question. Application of the relevant law to a problem raised by the reference before the High Court is not normally excluded merely because at the date when the Tribunal decided the question the relevant law was not or could not be brought to its notice.' Therefore, following this judgment, we must hold that Mr. Sastri is entitled to rely on the 1962 Order and it is our duty to answer the reference in accordance with the amendment made by the Order, unless the question referred is not couched in terms of sufficient amplitude to cover an enquiry into the question in the light of the amended law." In that case, the Constitution Bench of the Supreme Court laid down the law as found in the passage extracted. Therefore, notwithstanding what has been said in Chatturam Horilram Ltd.'s case [1955] 27 ITR 709 (SC), we must hold that the correct view is the view taken by the Constitution Bench in regard to the scope and jurisdiction of the reference. In this context, we must also notice a contention ad....