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Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Case No. 73 of 1978
Judge
Reported in[1982]134ITR97(MP)
ActsIncome Tax Act, 1961 - Sections 256(1)
AppellantGwalior Rayon Silk Mfg. (Wvg.) Co. Ltd.
RespondentCommissioner of Income-tax
Appellant AdvocateDesai and ;Chitale Puntambekar, Advs.
Respondent AdvocateS.C. Bagadia, Adv.
Excerpt:
- .....for the assessment years 1963-64 and 1964-65, the deduction claimed by the assessee on account of salary paid to mrs. indiraben parekh, mrs. indramani mandelia and mrs. sumitradevi mandelia was disallowed by the ito on the ground that the expenditure was not incurred for the purpose of business. on appeal, the aac upheld the claim of the assessee. the revenue thereupon preferred an appeal before the tribunal. the tribunal held that part of the salary paid to mrs. indramani mandelia and mrs. sumitradevi mandelia was attributable to extra-commercial considerations and was liable to be disallowed. aggrieved by that order, the assessee filed a reference application, which was rejected by the tribunal. hence, the assessee has preferred this application.3. having heard learned counsel for the.....
Judgment:

Sohani, J.

1. This is an application under Section 256(2)of the I.T. Act, 1961, hereinafter ' the Act '.

2. The material facts giving rise to this application briefly are as follows : For the assessment years 1963-64 and 1964-65, the deduction claimed by the assessee on account of salary paid to Mrs. Indiraben Parekh, Mrs. Indramani Mandelia and Mrs. Sumitradevi Mandelia was disallowed by the ITO on the ground that the expenditure was not incurred for the purpose of business. On appeal, the AAC upheld the claim of the assessee. The revenue thereupon preferred an appeal before the Tribunal. The Tribunal held that part of the salary paid to Mrs. Indramani Mandelia and Mrs. Sumitradevi Mandelia was attributable to extra-commercial considerations and was liable to be disallowed. Aggrieved by that order, the assessee filed a reference application, which was rejected by the Tribunal. Hence, the assessee has preferred this application.

3. Having heard learned counsel for the parties, we have come to the conclusion that this application deserves to be allowed. In our opinion, the following question of law does arise out of the order passed by the Tribunal :

'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in disallowing a part of the salary paid by the assessee to Mrs. Indramani Mandelia and Mrs. Sumitradevi Mandelia for the assessment years 1963-64 and 1964-65 ?'

4. The application is, therefore, allowed. The Tribunal is directed to state the case and refer the aforesaid question of law to this court for its opinion. In the circumstances of the case, parties shall bear their own costs of this application.


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