INNOSEARCH LIMITED vs. COMMISSIONER OF INCOM-TAX

ITR/5/1999HC GujaratGJHC24025163199907 November 2001Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
AI SummaryRemanded

What were the facts?

The assessee, Innosearch Limited, is challenging a disallowance of Rs. 28,612/- made by the lower authorities for the assessment year 1984-85. This disallowance pertains to expenses incurred on 'Dealers' Boards & Hoardings, Display and Dealers Aid'. The Income Tax Appellate Tribunal (ITAT), Ahmedabad, had confirmed this disallowance. The ITAT's order was based on its previous decision in Income Tax Appeal No. 917/Ahd/82 for the assessment year 1979-80. The present matter is a reference at the instance of the assessee to the High Court of Gujarat.

What did the High Court hold?

The High Court declined to answer the question referred to it, stating that it does not involve a substantial question of law. The Court noted that its earlier decision in Income Tax Reference No. 292 of 1984, concerning assessment year 1979-80, had held that whether an expenditure is aimed at attracting consumers or is merely an aid to selling is a question of fact. In that prior case, the Tribunal had concluded that such expenses were primarily aimed at attracting consumers and were part of publicity expenditure, which the High Court treated as a finding of fact not giving rise to a question of law. Since the Tribunal in the present case had also given a similar finding of fact, following its earlier decision, the High Court deemed the Tribunal's finding to be one of fact and not a question of law. Therefore, the reference was disposed of without answering the question.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the lower authorities were justified in disallowing a sum of Rs. 28,612/- incurred by the assessee as Dealers' Boards & Hoardings, Display and Dealers Aid under Section 37(3A) of the Income Tax Act, 1961? Assessee's Contention: The assessee, through its counsel Mr. R.K. Patel, is seeking an opinion from the High Court on the legality of the disallowance. The core of the dispute revolves around whether the expenditure qualifies for deduction under Section 37(3A). Revenue's Contention: The revenue, represented by Mr. Mihir H. Joshi, relies on the findings of the lower authorities and the Tribunal. The revenue's position is that the disallowance was justified. The judgment refers to a prior decision of the High Court in Income Tax Reference No. 292 of 1984, which dealt with a similar question for assessment year 1979-80.

Which sections of the Income-tax Act were involved?

Section 37(3A)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 5 of 1999

For Approval and Signature:

Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 37(3A)

All 29 judgments and leading authorities on Section 37(3A) →

Recent GST High Court judgments

Search GST case law →