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Commissioner of Income-tax Vs. Neimla Textile and Finishing Mills P. Ltd. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberIncome-tax Reference No. 66 of 1976
Judge
Reported in[1981]130ITR397(P& H)
ActsIncome Tax Act, 1961 - Sections 37(1)
AppellantCommissioner of Income-tax
RespondentNeimla Textile and Finishing Mills P. Ltd.
Appellant Advocate D.N. Awasthy and; B.K. Jhingan, Advs.
Respondent Advocate B.K. Gupta, Adv.
Excerpt:
- sections 80 (2) & 89 & punjab motor vehicles rules, 1989, rules 85 & 80: [t.s. thakur, cj, jasbir singh & surya kant, jj] appeal against orders of state or regional transport authority imitation held, a stipulation regarding the period of limitation available for invoking the remedy shall have to be strictly construed. that is because any provision by way of limitation is in the nature of a restraint on the remedy provided under the act. so viewed two inferences are clear viz., (1) sections 80 and 89 of the act read with rule 85 of the rules make it obligatory for the authorities making the order to communicate it to the applicant concerned and (2) the period of limitation for any appeal against the order is reckonable from the date of such communication of the reasons would imply..........year; 1961-62 claimed a deduction of rs. 69,228 stated to have been paid as commission to m/s. textile processing agency, amritsar, for procuring business for the assessee. this amount was disallowed by the ito but, on appeal, the aac modified the order and allowed a deduction of rs. 33,809, thejamount actually incurred by way of expenses by m/s. textile processing agency, as business expenditure. the order of the appellate authority was confirmed by the tribunal. dissatisfied therewith, the revenue got referred the following question for the opinion of this court :'whether, on the facts and in the circumstances of the case, the amount of rs. 33,809 claimed by the assessee in the assessment for the year 1961-62 was an admissible deduction under section 37(1) of the income-tax act,.....
Judgment:

S.P. Goyal, J.

1. The assessee-company during the accounting year; 1961-62 claimed a deduction of Rs. 69,228 stated to have been paid as commission to M/s. Textile Processing Agency, Amritsar, for procuring business for the assessee. This amount was disallowed by the ITO but, on appeal, the AAC modified the order and allowed a deduction of Rs. 33,809, thejamount actually incurred by way of expenses by M/s. Textile Processing Agency, as business expenditure. The order of the appellate authority was confirmed by the Tribunal. Dissatisfied therewith, the revenue got referred the following question for the opinion of this court :

'Whether, on the facts and in the circumstances of the case, the amount of Rs. 33,809 claimed by the assessee in the assessment for the year 1961-62 was an admissible deduction under Section 37(1) of the Income-tax Act, 1961 ?'

2. From the perusal of the statement of facts, it is evident that the amount in dispute was, in fact, incurred as expenses by M/s. Textile Processing Agency. Even though the amount claimed to have been paid by way of commission was disallowed, because the contract of agency had come into being after the accounting year, still it is not disputed that the assessee was bound to reimburse to the said agency for the actual expenditure incurred by the latter. The assessee was, therefore, bound under law to pay the amount in dispute to M/s. Textile Processing Agency and the said amount was, therefore, rightly allowed as business expenditure of the assessee. The question referred to is, accordingly, answered in the affirmative, against the revenue and in favour of the assessee. No costs.


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