The Commissioner Of Income-Tax Ii, Pune v. The Indian Card Clothing Co.ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION. INCOME TAX APPLICATIION NO. 25 OF 1999. The Commissioner of Income-tax II, Pune.. Applicant. vs. The Indian Card Clothing Co.Ltd. ... Respondents. Mr. Ashok Kotangale for the Applicant. Mr. Pramod Vaidy for the respondents. CORAM : V.C.DAGA & J.P.DEVADHAR,JJ.DATED : 13.6 .2006. P.C. : ---- .Heard rival parties. .This application is filed under section 256 (1) of the Income Tax Act, 1961, raise following questions of law for reference to this Court by the Tribunal. .Whether on the facts and in the circumstances of the case, the Tribunal wasjustified in law in deleting the prima facieaddition on account of expenditure onmaintenance of guest house, when theprovisions of section 37(4) of theIncome-tax Act, clearly disallow suchexpenditure?" .After hearing rival parties, it is not in dispute that at the relevant time there wascontroversy as to whether any item of expenditurecovered by the provisions of sections 30 to 32 ofthe Act should be disallowed as it would be hit byby section 37(4). The matter was, ultimately,resolved by two judgments of this Court, in favourof the assessee viz.; in CIT vs. Chase Bright Steel Ltd. 177 ITR 124 and in case of CenturySpinning and Mfg.Co. (189 ITR 660) and the Tribualwas pleased to hold that the issue was debatable asinterpretation of law was involved. .In the above backdrop, view taken by theTribunal was just and proper view. The applicationseeking reference is, therefore, rejected with noorder as to costs. (V.C.DAGA,J.) (J.P.DEVADHAR,J.)