COMMISSIONER OF INCOME TAX vs. MEHSANA DIST. CO.OP.MILK PRODUCERS UNION LTD.

ITR/178/1989HC GujaratGJHC24012958198904 October 2001Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the Tribunal was not right in law in holding that relief under Section 35C of the Act was available to the assessee only to the extent of 10% of the expenditure as claimed. The Court noted that this issue had already been decided in the case of Kaira District Cooperative Milk Producers Union Ltd. The High Court had previously held that the assessee is entitled to a deduction of the entire amount of expenditure incurred under Section 35C of the Act. Therefore, the question referred to the Court was answered in the negative, in favor of the assessee and against the Revenue. The reference was disposed of accordingly with no order as to costs.

What were the facts?

The Commissioner of Income Tax (Revenue) has referred a question of law to the High Court of Gujarat at Ahmedabad, at the instance of the Income Tax Appellate Tribunal, Ahmedabad Bench 'A'. The assessee is Mehsana District Co-operative Milk Producers Union Ltd. The dispute pertains to the assessment year(s) not explicitly stated in the judgment. The order under challenge is the decision of the Income Tax Appellate Tribunal concerning relief under Section 35-C of the Income Tax Act, 1961. The Tribunal had held that the assessee was entitled to relief at 10% of the expenditure claimed. The High Court heard arguments from both the Revenue and the assessee. The parties agreed that the issue had been decided in a previous case, Kaira District Cooperative Milk Producers Union Ltd.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal has been right in law in holding that relief under section 35-C is exigible to the assessee at 10% of the expenditure as claimed? Assessee's contention: The assessee contended that the issue had been decided in their favor in the case of Kaira District Cooperative Milk Producers Union Ltd. vide decision dated 2/7/2001 in Income Tax Reference No.32 of 1987. Revenue's contention: The Revenue argued that the Tribunal was correct in allowing relief only to the extent of 10% of the expenditure claimed under Section 35-C.

Which sections of the Income-tax Act were involved?

Section 35-C,Section 256(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 178 of 1989

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.

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