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CASE NO.:

Appeal (civil) 1581 of 2001

PETITIONER:

THE CHIEF COMMISSIONER OF INCOME TAX, COCHIN

Vs.

RESPONDENT:

M/S. KESARIA TEA CO. LTD.

DATE OF JUDGMENT: 19/03/2002

BENCH:

S. Rajendra Babu, K.G. Balakrishnan & P. Venkatarama Reddi.

JUDGMENT:

P.VENKATARAMA REDDI, J.

The opinion recorded by the Kerala High Court in ITR

No. 16 of 1997 has given rise to this appeal filed by the Chief

Commissioner of Income-tax. The dispute relates to the

assessment year 1985-86. At the instance of the Revenue the

following question was referred under Section 256(1) of the

Income-tax Act for the opinion of the High Court:

"Whether on the facts and in the

circumstances of the case, the Tribunal

is right in law and fact in holding that

Rs.3,02,758/- cannot be brought to tax

and in deleting the addition of

Rs.3,02,758/- sustained by CIT

(Appeals)?"

The High Court accepted the view of the Tribunal which partly

allowed the appeal of the assessee and answered the question in

favour of the assessee.

The facts in brief are: The respondent-assessee is

engaged in the business of tea, spices etc. During the assessm