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international Instruments Pvt. Ltd. Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKarnataka High Court
Decided On
Case NumberI.T.C. No. 115 of 1979
Judge
Reported in[1994]205ITR483(KAR); [1994]205ITR483(Karn)
ActsIncome Tax Act, 1961 - Sections 40A(5)
Appellantinternational Instruments Pvt. Ltd.
RespondentCommissioner of Income-tax
Excerpt:
.....rule 11 is to keep out of courts irresponsible law suits, a tool in the hands of the courts. the question to be decided while dealing with an application filed under order 7, rule 11(a) cpc, is whether a real cause of action is set out in the plaint or something purely illusory has been stated. if on a meaningful and not formal reading of the plaint, it is manifestly vexatious and meritless in the sense of not disclosing a clear right to sue, the court should exercise the power under order 7, rule 11(a). if clever drafting has created the illusion of a cause of action, it must be nipped in the bud at the first hearing by examining the party searchingly under order 10 of the code. suffice it to state that the family court having considered the pleading in the affidavit accompanying the..........1961 : '1. whether, on the facts and in the circumstances of the case, the disallowance under section 40a(5) of the income-tax act, 1961, of rs. 12,000 out of remuneration paid to 'managing director' and rs. 14,492 out of remuneration paid to director was right in law 2. whether, on the facts and in the circumstances of the case, the interest paid under sections 217(1a) and 220(2) of the act was allowable as a deduction ?' 2. as far as question no. 1 is concerned, that question is covered by the decision in this court in international instruments p. ltd. v. cit : [1981]130itr315(kar) , wherein a similar question has been answered in favour of the assessee. following the said decision, we answer this question also in the negative and in favour of the assessee. 3. as far as question no......
Judgment:

S.R. Rajasekhara Murthy, J.

1. The following two questions have been referred for the opinion of this court by the Income-tax Appellate Tribunal, Bangalore Bench, under section 256(1) of the Income-tax Act, 1961 :

'1. Whether, on the facts and in the circumstances of the case, the disallowance under section 40A(5) of the Income-tax Act, 1961, of Rs. 12,000 out of remuneration paid to 'managing director' and Rs. 14,492 out of remuneration paid to director was right in law

2. Whether, on the facts and in the circumstances of the case, the interest paid under sections 217(1A) and 220(2) of the Act was allowable as a deduction ?'

2. As far as question No. 1 is concerned, that question is covered by the decision in this court in International Instruments P. Ltd. v. CIT : [1981]130ITR315(KAR) , wherein a similar question has been answered in favour of the assessee. Following the said decision, we answer this question also in the negative and in favour of the assessee.

3. As far as question No. 2 is concerned, that question is covered by the decision of this court in the case of the same assessee in I.T.R.C. Nos. 109 and 110 of 1979 disposed of on September 14, 1983 (CIT v. International Instruments (P.) Ltd. : [1983]144ITR936(KAR) . Accordingly, this question is answered in the negative and in favour of the Department.


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