UNIVERSAL DUESTUFF INDUSTRIES LIMITED vs. COMMISSIONER OF INCOME-TAX

ITR/118/1985HC GujaratGJHC24012250198527 February 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE KUNDAN SINGH2 pages
AI SummaryAllowed

What were the facts?

The Income-tax Appellate Tribunal, Ahmedabad, referred a question to the Gujarat High Court concerning assessment year 1979-80. The assessee, Universal Duesuff Industries Limited, sought weighted deduction under Section 35B of the Income Tax Act, 1961, on specific expenses. These expenses included staff salary for export (Rs. 1,12,896), postage, telephone, and telegrams (Rs. 56,718), and Bombay office expenses on a percentage basis (Rs. 95,424). The High Court noted that in the assessee's own case for assessment year 1978-79, it had already decided a similar issue regarding weighted deduction under Section 35B for these very items.

What did the High Court hold?

The High Court, in answering the reference, followed its own prior decision in the assessee's own case for the assessment year 1978-79 (Income-tax Reference No. 176 of 1984). In that earlier decision, the Court, citing CIT vs. Jai Industries and other precedents, had held that the assessee was not entitled to weighted deduction under Section 35B for staff salary, postage, telephone, telegrams, and Bombay office expenses on a percentage basis. Therefore, applying the same reasoning and precedent, the High Court held that the assessee was not entitled to claim weighted deduction for these three items for the assessment year 1979-80. The question referred to the Court was answered in the affirmative, in favour of the Revenue and against the assessee. The Reference was disposed of accordingly.

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 assessee was not entitled to claim weighted deduction under Section 35B of the Income Tax Act, 1961, on: (a) Rs. 1,12,896, representing 65.5% of staff salary for export. (b) Rs. 56,718, expenditure on postage, telephone, and telegrams. (c) Rs. 95,424, Bombay office expenses on a percentage basis. Assessee's Contention: The assessee claimed entitlement to weighted deduction under Section 35B for the specified expenses. Revenue's Contention: The revenue contended that the assessee was not entitled to the weighted deduction for these items, a position previously upheld by the High Court in a related matter.

Which sections of the Income-tax Act were involved?

Section 35B,Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 118 of 1985

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE KUNDAN SINGH ============================================================ 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 C[[onstitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge?

The order continues below.

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