DINESH MILLS LTD. vs. COMMISSIONER OF INCOME TAX,

ITR/273/1984HC GujaratGJHC24011938198423 April 1999Author: HONOURABLE MR. JUSTICE R.BALIA,HONOURABLE MR. JUSTICE ANIL R. DAVE2 pages
AI SummaryAllowed

What were the facts?

The assessee, Dinesh Mills Ltd., is challenging an order of the Income Tax Appellate Tribunal (ITAT) Bench B, Ahmedabad, for the assessment year 1978-79. The ITAT's order, ITA No. 1106/Ahd/82, is the subject of the reference. The dispute pertains to whether commission paid to the Managing Director is to be considered part of remuneration for the purpose of Section 40(c) of the Income Tax Act, 1961. The assessee has sought a reference of this question of law to the High Court.

What did the High Court hold?

The High Court noted that the assessee's counsel candidly admitted that the question of law has been decided by the High Court in CIT Vs. Rohit Mills, 219 ITR Page 228, against the assessee. Consequently, following the aforesaid decision, the question referred to the court is answered in the affirmative, in favour of the Revenue and against the assessee. The Tribunal was therefore held to be right in its conclusion that commission paid to the Managing Director is a part of remuneration for applying the provisions of Section 40(c). No order as to costs was made.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that commission paid to the Managing Director is a part of remuneration for applying the provisions of section 40(c) of the I.T.Act, 1961? The assessee's contention is that the commission paid to the Managing Director should not be treated as remuneration for the purpose of Section 40(c). The revenue's contention, as reflected in the ITAT's decision, is that it should be. The assessee's counsel candidly stated that this court has already decided this issue against the assessee in CIT Vs. Rohit Mills, 219 ITR Page 228.

Which sections of the Income-tax Act were involved?

Section 40(c)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 273 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE R.BALIA. and MR.JUSTICE A.R.DAVE ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question 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?

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The order continues below.

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