Patna H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amount representing the contingency reserve does not form part of the commercial profit or real income of the assessee and is not includible in the total assessable income of the assessee relating to the asst. yrs. 1971-72 and 1972-73 ?

Counsel Appeared

B.P. Rajgarhia & S.K. Sharan, for the Revenue: None appeared, for the Assessee

BY THE COURT :

These are references under s. 256(1) of the IT Act, 1961 (hereinafter to be referred to as ” the Act “). These references are concluded by two Division Bench decisions of this very assessee reported in 1978 CTR (Pat)314:(1979) 117 ITR 516 and (1985) 44CTR (Pat) 119: (1985) 154 ITR 812. In these references, we are concerned with the asst. yrs. 1971-72 and 1972-73. The question referred to us for our opinion is exactly the same as those in the earlier cases, mentioned above, namely:

” Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amount representing the contingency reserve does not form part of the commercial profit or real income of the assessee and is not includible in the total assessable income of the assessee relating to the asst. yrs. 1971-72 and 1972-73 ? “

In view of the earlier Division Bench decisions of this Court, these references must be answered against the Revenue and in favour of the assessee. We, therefore, hold that the Tribunal was correct in holding that the amount representing the contingency reserve did not form part of the commercial profit and real income of the assessee and was not includible in the total assessable income of the assessee relating to the asst. yrs. 1971-72 and 1972-73. The references are answered accordingly. However, there will be no order as to costs.

[Citation : 169 ITR 382]