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Commissioner of Income-tax Vs. General Marketing and Manufacturing Co. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberIncome-tax Reference No. 364 of 1975
Judge
Reported in[1987]165ITR566(Cal)
ActsIncome Tax Act, 1961 - Section 40
AppellantCommissioner of Income-tax
RespondentGeneral Marketing and Manufacturing Co.
Appellant AdvocateB.K. Baghci and ;A.N. Bhattacharyya, Advs.
Respondent AdvocateR.N. Bajoria and ;S.K. Bagadia, Advs.
Excerpt:
- .....high court in the case reported in cit v. manju-shree plantations ltd. [1985] 125 itr 150 and the bombay high court in the case of cit v. indokem p. ltd. : [1981]132itr125(bom) , though a contrary decision has been taken by the full bench of the kerala high court in the case of cit v. commonwealth trust ltd. : [1982]135itr19(ker) , we must answer the question in the affirmative and in favour of the assessee.2. incidentally, we may refer to the decision in the special leave application from the order of the bombay high court being special leave petition no. 2970 of 1976 in income-tax appeal no. 113 of 1976 of the bombay high court, which was dismissed by the supreme court by an order dated april 4, 1975. (sic)3. the question is, therefore, answered in the affirmative and in favour of the.....
Judgment:

Sabyasachi Mukharji, J.

1. In this reference under Section 256(1) of the Income-tax Act, 1961, the following question has been referred to this court:

' Whether, on the facts and circumstances of the case and on a proper interpretation of Section 40(c)(iii)/40(a)(v) of the Income-tax Act, 1961, the Tribunal was right in holding that the cash payments made by the assessee to its employees to reimburse them for the expenses incurred by way of house rent, medical expenses and salaries of gardeners and watch and ward employees in the Relevant previous years did not result in the provision of any benefit, amenity or perquisite and should not, therefore, be taken into account in computing the disallowances to be made under the said Section 40(c)(iii)/40(a)(v) '

In view of the facts found by the Tribunal and in view of the principles laid down by the Division Bench of this court in the case of CIT v. Kanan Devan Hills Produce Company Ltd. : [1979]119ITR431(Cal) , principles of which decision have been followed by the Karnataka High Court in the decision reported in CIT v. Mysore Commercial Union Ltd. : [1980]126ITR340(KAR) and the Madras High Court in the case reported in CIT v. Manju-shree Plantations Ltd. [1985] 125 ITR 150 and the Bombay High Court in the case of CIT v. Indokem P. Ltd. : [1981]132ITR125(Bom) , though a contrary decision has been taken by the Full Bench of the Kerala High Court in the case of CIT v. Commonwealth Trust Ltd. : [1982]135ITR19(Ker) , we must answer the question in the affirmative and in favour of the assessee.

2. Incidentally, we may refer to the decision in the special leave application from the order of the Bombay High Court being Special Leave Petition No. 2970 of 1976 in Income-tax Appeal No. 113 of 1976 of the Bombay High Court, which was dismissed by the Supreme Court by an order dated April 4, 1975. (sic)

3. The question is, therefore, answered in the affirmative and in favour of the assessee.

4. There will be no order as to costs.

Suhas Chandra Sen, J.

5. I agree.


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