1998 PLP 3017 (PTD)
KHATAU MAKANJI SPINNING & WEAVING CO. LTD. Versus COMMISSIONER OF INCOME-TAX
| Citation | 1998 PLP 3017 (PTD) |
| Forum / Court | 222 I T R 472 |
| Bench Members | Dr. B:P. Saraf and S.M. Jhunjhunuwala, JJ |
| Parties | KHATAU MAKANJI SPINNING & WEAVING CO. LTD. Versus COMMISSIONER OF INCOME-TAX |
| Primary Law | (c) Income-tax, (a) Income-tax, (b) Income-tax |
Q1: What are the key laws and sections cited in 1998 PLP 3017 (PTD)?
This judgment primarily cites: (c) Income-tax, (a) Income-tax, (b) Income-tax as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 1998 PLP 3017 (PTD)?
The case was heard and decided by the 222 I T R 472 bench comprising: Dr. B:P. Saraf and S.M. Jhunjhunuwala, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 1998 PLP 3017 (PTD) (KHATAU MAKANJI SPINNING & WEAVING CO. LTD. Versus COMMISSIONER OF INCOME-TAX). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- G.S. Jetley, Senior Advocate with P.S. Jetley instructed by Mrs. S. Bhattacharya for the Commissioner
Headnotes / Summary
Investment allowance
Foreign exchange
Additional cost of imported assets due to fluctuation in rate of exchange
Deduction not allowable on such additional cost
Indian Income Tax Act, 1961, S.32-A.
Remuneration to Director
Remuneration includes commission for purposes of S.40(c)-- Indian Income Tax Act, 1961, S.40(c).
Tribunal has power to admit additional grounds
Indian Income Tax Act, 1961. The Tribunal has power to admit an additional ground. Ahmedabad Electricity Co. Ltd. v. CIT (1993) 199 ITR 351 (Bom.) fol. Remuneration includes commission for purposes of application of section 40(c) of the Income Tax Act, 1961. Godavari Sugar Mills Ltd. v. CIT,(1994) 208 ITR 801 (Bom.) fol. The assessee is not entitled to investment allowance under section 32-A of the Income Tax Act, 1961, in respect of additional cost of the imported assets which has taken place because of the fluctuation in the rate of exchange in the year subsequent to the year of acquisition. P.S. Pardiwala with P.F. Kaka instructed by Kanga & Co. for the Assessee. G.S. Jetley, Senior Advocate with P.S. Jetley instructed by Mrs. S. Bhattacharya for the Commissioner
Judgment & Decree
DR. B.P. SARAF, J.
By this reference under section 256(1) of the Income Tax Act, 1961, following three questions have been referred by the Tribunal at the instance of the assessee to this Court for opinion: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in refusing to admit the additional ground, namely, whether the remuneration paid to the directors was covered by section 37 of the Income Tax Act and not by the provisions of section 40(c), in view of the fact, the Income-tax Officer had not given the requisite finding under section 40(c) of the Income Tax Act? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that 'remuneration' included commission for the purposes of the application of section 40(c) of the Income Tax Act? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was not eligible for investment allowance under section 32-A of the Income Tax Act in respect of the additional cost of imported assets of Rs.2,21,833?" Learned counsel for the parties agreed that the first question is covered by the Full Bench decision of this Court in the case of Ahmedabad Electricity Co. Ltd. v. CIT (1993) 199 ITR
351. Following the same, we answer this question in the negative and in favour of the assessee. Learned counsel for the parties are also agreed that the second question is covered by the decision of this Court in the case of Godavari Sugar Mills Ltd. v. CIT (1994) 208 ITR
801. Following the same, we answer the second question in the affirmative and in favour of the Revenue. So far as the third question is concerned, learned counsel for the assessee submits that this question is not covered and the assessee is entitled to investment allowance under section 32-A in respect of additional costs of the imported asset which has taken place because of the fluctuation in the rate of exchange in the year subsequent to the year of acquisition. We have heard learned counsel for the assessee. We have perused section 32-A. We do not find any thing there which may support the above contention of learned counsel for the assessee. We, therefore, answer the third question in the affirmative, i.e., in favour of the Revenue and against the assessee. No order as to costs. M.B.A./1562/FC Order accordingly.