JUDGMENT

C. As. Nos. 1406-07 of 1976

The High Court answered the question referred to it under the Income-tax Act, 1961 in favour of the assessee, following its earlier decision in the case of C.I.T. v. Elecon Engineering Co. Ltd. (1976) 104 ITR 510 (Guj). The decision in the said case has been affirmed by this Court in C.I.T. v. Elecon Engineering Co. Ltd. (1987) 167 ITR 639. In the circumstances, the High Courts decision has to be upheld and these two appeals have to be dismissed. We direct accordingly. There will, however, be no order as to costs.

Civil Appeal No.784(NT) of 1977

2. Two questions were referred to the High Court under the Income-tax Act, 1961. So far as the first question is concerned the answer of the High Court which was in favour of the assessee has to be upheld in view of the decision of this Court in C.I.T. v. Elecon Engineering Co. (1987) 167 ITR 639: .

3. So far as the second question is concerned, the grievance of the Commissioner of Income-tax in the reference before the High Court was that the Tribunal should not have allowed the assessee to raise an additional ground for the first time before it. Both the High Court and the Tribunal have pointed out that the