C.I.T. ROHTAK vs. M//S PORRITS & SPENCER

ITR/44/1996HC Punjab & HaryanaPHHC01035015199620 November 2008Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE L.N. MITTAL2 pages
AI SummaryRemanded

What were the facts?

This case involves a reference of questions of law to the High Court of Punjab and Haryana at Chandigarh by the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'E'. The reference arises from Income Tax Appeal Nos. 2977 and 3019(Del)/90 concerning the assessment year 1986-87. The applicant is the Commissioner of Income Tax, Haryana, Rohtak, and the respondent is M/s Porritts & Spencer (Asia) Ltd., Faridabad. The core of the dispute revolves around additions made by the Assessing Officer and subsequent deletions by the Commissioner of Income Tax (Appeals) [CIT(A)], which were upheld by the ITAT. The specific amounts in dispute are Rs. 1,83,855/- related to commission/bonus paid to employees and other expenses related to employee benefits.

What did the High Court hold?

The High Court held that the questions of law referred to it were covered by its previous order dated 16.09.2008 in I.T.R. Nos. 80 to 82 of 1982 (M/s Porrits & Spencer (Asia) Ltd., New Delhi v. The Commissioner of Income-tax, Haryana). Consequently, the present reference was decided in the same terms as the earlier judgment. While the specific reasoning of the earlier judgment is not detailed here, it implies that the Tribunal's decision on the deletion of the addition of Rs.1,83,855/- under Section 36(1)(ii) and the applicability of Rule 3(c)(ii) for disallowances under Section 40-A(5)/40(c) for the listed employee expenses was affirmed by the High Court based on its prior ruling. The operative direction was to decide the reference in terms of the earlier judgment.

What were the issues?

The Tribunal had to decide two main questions of law: 1. Whether, on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in upholding the decision of the Ld. CIT(A) deleting the addition of Rs.1,83,855/- made u/s 36(1)(ii) on account of commission / bonus paid to employees? 2. Whether, on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in holding that in computing the disallowance u/s 40-A(5)/40(c), of the following expenses, the provisions of Rule 3(c)(ii) are applicable: a) Medical reimbursement expenses of the employees. b) Group personal accident insurance/hospitalisation insurance scheme premium. c) Medical Insurance premium. d) Telephone expenses. e) Salary, wages and bonus etc. paid to personal servants engaged by the employees. The revenue argued that the addition made under Section 36(1)(ii) was justified and that the provisions of Rule 3(c)(ii) were not applicable for computing disallowances under Section 40-A(5)/40(c) for the listed employee expenses. The assessee contended that the deletion by the CIT(A) was correct and that Rule 3(c)(ii) was indeed applicable to the aforementioned expenses.

Which sections of the Income-tax Act were involved?

Section 36(1)(ii),Section 40-A(5),Section 40(c)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No.44 of 1996 Date of decision: 20.11.2008 The Commissioner of Income Tax, Haryana, Rohtak. -----Applicant. Vs. M/s Porritts & Spencer (Asia) Ltd., Faridabad. -----Respondent. CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N. MITTAL Present: Mr. Yogesh Putney, Sr. Standing Counsel for the revenue. Mr. Santosh Aggarwal, Advocate & Mr. A.C. Jain, Advocate for the assessee. -----

ORDER:

Following questions of law have been referred for opinion of this Court by the Income Tax Appellate Tribunal, Delhi Bench ‘E’ Delhi arising out of I.T.A. Nos.2977 and 3019(Del)/90 in respect of assessment year 1986-87:- “1. Whether, on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in upholding the decision of the Ld. CIT(A) deleting the addition of Rs.1,83,855/- made u/s 36(1)(ii) on account of commission / bonus paid to employees?”

ITR No.44 of 1996

2.

Whether, on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in holding that in computing the disallowance u/s 40-A(5)/40(c), of the following expenses, the provisions of Rule 3(c)(ii) are

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 36(1)(ii)

All 220 judgments and leading authorities on Section 36(1)(ii) →

Recent GST High Court judgments

Search GST case law →