High Court Of Gujarat
Dinesh Mills Ltd. vs. CIT
Section 37(1), 40(C)
A.R. Dave & D.A. Mehta, JJ.
IT Ref. No. 20 of 1988
24th October, 2002
Counsel Appeared
J.P. Shah, for the Applicant : Manish R. Bhatt, for the Respondent
JUDGMENT
A.R. DAVE, J. :
At the instance of the assessee, the following questions arising out of the order passed by the Tribunal,Ahmedabad Bench “B” have been referred to this Court for its opinion under the provisions of s. 256(1) of the IT Act, 1961 (hereinafter referred to as ‘the Act’):
At the instance of the assessee :
“1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in considering the commission paid to the managing director as the perquisite for the purpose of s. 40 (c) of the Act ?
2. Whether, on the facts and in the circumstances of the case, legal and professional expenses of Rs. 22,518 in respect of amalgamation of the sister concern with the assessee-company is allowable as revenue expenditure or capital expenditure ?”
Mr. J.P. Shah, learned advocate has appeared for the assessee and Mr. M.R. Bhatt, learned standing counsel has appeared for the Revenue.
Learned counsel have submitted that the questions which have been referred to this Court have already been answered by this Court or by the apex Court.
So far as question No. 1 which has been referred at the instance of the assessee is concerned, it has been submitted that the said question has already been answered against the assessee in the case of CIT vs. Rohit Mills Ltd. (1996) 132 CTR (Guj) 556 : (1996) 219 ITR 228 (Guj). Looking to the law laid down by this Court in the aforesaid judgment, we answer the said question in the affirmative i.e., against the assessee and in favour of the Revenue.
So far as question No. 2 is concerned, looking to the law laid down by the apex Court in the case of CIT vs. Bombay Dyeing & Mfg. Co. Ltd. (1996) 132 CTR (SC) 217 : (1996) 219 ITR 521 (SC), we answer the question in favour of the assessee and against the Revenue i.e., the legal and professional expenses in respect of amalgamation are allowable as revenue expenditure.
The following questions have been referred to this Court at the instance of the Revenue :
At the instance of the Revenue “
1. Whether, on the facts and in the circumstances of the case, the Tribunal has not erred in law in holding that a sum of Rs. 20,000 out of motor car expenses is not disallowable as personal and non-business use of motor car in the hands of the assessee ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is entitled to the depreciation as claimed and 1/7th portion of the depreciation of motor car is not disallowable ?”
So far as the questions which have been referred at the instance of the Revenue are concerned, it has been submitted by the learned advocate that looking to the law laid down in the case of Sayaji Iron & Engg. Co. vs. CIT (2002) 172 CTR (Guj) 339 : (2002) 253 ITR 749 (Guj) by this Court, the aforesaid questions are required to be decided in favour of the assessee and, therefore, the said questions are also decided in favour of the assessee and against the Revenue.
The reference stands disposed of accordingly with no order as to costs.
[Citation : 268 ITR 502]
