Mihir Textiles Ltd v. Commissioner Of Income-Tax

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 41 of 1988 For Approval and Signature: Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- MIHIR TEXTILES LTD. Versus COMMISSIONER OF INCOME-TAX -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 41 of 1988 MR MJ SHAH for Petitioner No. 1 MR BB NAIK with MR MANISH R BHATT for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE D.A.MEHTA Date of decision: 04/10/2001 ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH) �In this reference, four questions are referred for our opinion in respect of assessment year 1979-80. While the first three questions are referred at the instance of the assessee, the last question is referred at the instance of the revenue. 2.�We have heard Mr Manish J Shah, learned counsel for the assessee and Mr BB Naik, learned counsel for the revenue. 3.�Both the learned counsel state that the controversies raised in the questions referred herein are concluded by the decision dated 28.8.2001 of this Court in Income-tax Reference No. 93 of 1987 in case of this very assessee. Following the said decision, we answer the questions as under :- �Question No. 1 Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the disallowance is required to be made u/s. 40(c) out of the remuneration paid to the Managing Director notwithstanding the fact that the remuneration was reasonable having regard to the business requirements of the Company?" �Following the aforesaid decision in Income-tax Reference No. 93 of 1987, our answer is in the affirmative i.e. in favour of the revenue and against the assessee. �Question No. 2 "Whether, the Appellate Tribunal was right in law in holding that commission is required to be included while computing the disallowance u/s.40(c) ?" �Following the aforesaid decision in Income-tax Reference No. 93 of 1987, our answer is in the affirmative i.e. in favour of the revenue and against the assessee. �Question No. 3 case, the Appellate Tribunal was right in confirming the disallowance of Rs.40,903/= invoking the provisions of section 37(5) of the Income-tax Act, 1961 ?" �Following the aforesaid decision in Income-tax Reference No. 93 of 1987, our answer is in the negative i.e. in favour of the assessee and against the revenue. �Question No. 4 "Whether, in law and on facts the assessee is entitled to the deduction of the royalty of Rs.36,969/- pad to Mettur Beardshell Limited ?" �Following the aforesaid decision in Income-tax Reference No. 93 of 1987, our answer is in the affirmative i.e. in favour of the assessee and against the revenue. 4.�The reference accordingly stands disposed of with no order as to costs. �����(M.S. Shah, J.) �����(D.A. Mehta, J.) sundar/-