2001 PLP 2774 (PTD)
COMMISSIONER OF INCOME‑TAX Versus MAHINDRA AND MAHINDRA LTD.
| Citation | 2001 PLP 2774 (PTD) |
| Forum / Court | 239 I T R 937 |
| Bench Members | Dr. B. P. Saraf and Dr. Mrs. Pratibha Upasani, JJ |
| Parties | COMMISSIONER OF INCOME‑TAX Versus MAHINDRA AND MAHINDRA LTD. |
Q1: What are the key laws and sections cited in 2001 PLP 2774 (PTD)?
This judgment primarily cites: statutory provisions as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2001 PLP 2774 (PTD)?
The case was heard and decided by the 239 I T R 937 bench comprising: Dr. B. P. Saraf and Dr. Mrs. Pratibha Upasani, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2001 PLP 2774 (PTD) (COMMISSIONER OF INCOME‑TAX Versus MAHINDRA AND MAHINDRA LTD.). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Headnotes / Summary
(a) Income‑tax‑‑‑ ‑‑‑‑Business expenditure‑‑‑Remuneration to employees ‑‑‑Superannuation fund‑‑‑Entire initial contribution is deductible‑‑‑Indian Income Tax Act, 196], S.37. (b) Income‑tax‑‑‑ ‑‑‑‑Business expenditure‑‑‑Company‑‑‑Ceiling on expenditure‑‑ Remuneration and perquisites to, employee‑Director‑‑‑Section 40(c) is applicable and not S.40A(5)‑‑‑Indian Income Tax Act, 1961, Ss.40(c) & 40A. The assessee is entitled to deduction of 100 per cent. of the initial contribution to the superannuation fund. The Assessing Officer has to apply the provisions of section 40(c) of the Income Tax Act, 1961, instead of section 40A(5) for working out the disallowances out of the remuneration and perquisites paid to the employee directors. CIT v. Hico Products (Pvt.) Ltd. (No.l) (1993) 201 ITR 567 (Bom.) and CIT v. Indian Engineering and Commercial Corporation (P.) Ltd. (1993) 201 ITR 723 (SC) fol. [The Supreme Court has granted special leave to the Department to appeal against this judgment‑‑‑see (1998) 234 ITR (St.) 29‑‑Ed.]. T.U. Khatri with J.P. Deodhar for the Commissioner. Nemo for the Assessee.
Judgment & Decree
The Assessing Officer has to apply the provisions of section 40(c) of the Income Tax Act, 1961, instead of section 40A(5) for working out the disallowances out of the remuneration and perquisites paid to the employee directors. CIT v. Hico Products (Pvt.) Ltd. (No.l) (1993) 201 ITR 567 (Bom.) and CIT v. Indian Engineering and Commercial Corporation (P.) Ltd. (1993) 201 ITR 723 (SC) fol. [The Supreme Court has granted special leave to the Department to appeal against this judgment‑‑‑see (1998) 234 ITR (St.) 29‑‑Ed.]. T.U. Khatri with J.P. Deodhar for the Commissioner. Nemo for the Assessee. By this reference under section 256(1) of the Income Tax Act, 1961, the Income‑tax Appellate Tribunal has, at the instance of the Revenue, referred the following questions of law to this Court for opinion: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that notwithstanding the notification issued by the Central Board of Direct Taxes the assessee is entitled to deduction of 100 per cent, of the initial contribution to the superannuation fund? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing the Assessing Officer to apply the provisions of section 40(c) instead of section 40A(5) for working out the disallowances out of the remuneration and perquisites paid to the employee‑directors?" Counsel for the Revenue submits that the controversy in the first question now stands concluded in favour of the assessee by the decision of this Court in CIT v. Mahindra Sintared Products Ltd, (I.T.R. No.289 of 1980, dated June 14, 1993), and following the same question No. l should be answered in favour of the assessee. Counsel for the Revenue further submits that controversy in question No.2 also stands concluded in favour of the assessee by the decision of this Court in CIT v. Hico Products (Pvt.) Ltd. (No. 1) (1993) 201 ITR 567 and by the decision of the Supreme Court in CIT v. Indian Engg. and Commercial Corporation (P.) Ltd. (1993) 201 ITR 723, and following the same, it should be answered in favour of the assessee. In view of the above statement, both the questions referred to us are answered in the affirmative and in favour of the assessee. Reference disposed of accordingly. No order as to costs. M,B.A.1281/FC Reference answered.