C I T, JALANDHAR vs. M/S GOLDEN VIEW ELECTRICAL INDST., JDR
What were the facts?
The Commissioner of Income Tax, Jalandhar (Revenue) has filed an Income Tax Reference (ITR) No. 404 of 1995 before the High Court of Punjab and Haryana at Chandigarh. The reference arises from an order dated 13.11.1992 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, in I.T.A.No.807(ASR)/1980. The assessment year in question is 1985-86. The dispute pertains to the disallowance of expenses on account of special turnover discount amounting to Rs. 2,16,664/-. The ITAT had held that these expenses were not to be taken into account for the purpose of disallowance under Section 37(3A) of the Income Tax Act, 1961.
What did the High Court hold?
The High Court answered the question of law in favour of the assessee and against the revenue. The reasoning provided is that the court had previously dealt with a similar issue concerning the disallowance of commission on sales in the case of CIT Vs. M/S Knit Foulds (P) Ltd. (supra). In that precedent, the court had ruled against the revenue and in favour of the assessee. Therefore, following the established precedent, the present reference is also decided against the revenue. The ratio decidendi is that if a similar issue has been decided by the High Court in favour of the assessee against the revenue, then subsequent similar references should be decided on the same lines. The operative direction is that the question of law is answered against the Revenue and in favour of the assessee.
What were the issues?
1. Whether, on the facts and in the circumstances of the case, the learned ITAT was right in law in holding that expenses on account of special turnover discount of Rs. 2,16,664/- are not to be taken into account for the purpose of disallowance under Section 37(3A) of the Income Tax Act, 1961? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The learned counsel for the revenue pointed out that a similar question regarding the disallowance of commission on sales was previously decided by this court in the case of CIT Vs. M/S Knit Foulds (P) Ltd., Kapurthala, ITR No.588 of 1995 decided on 17.1.2005. In that case, the issue was answered against the revenue and in favour of the assessee.
Which sections of the Income-tax Act were involved?
Section 37(3A)
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Cause title — parties, addresses and appearances
JUDGMENT Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench Amritsar arising out of its order dated 13.11.1992 passed in I.T.A.No.807(ASR)/1980, in respect of the assessment year 1985-86. “Whether on the facts and in the circumstance of the case, the Ld. ITAT was right in law in holding the expenses on account of special turn over discount of Rs.2,16,664/- are not to be taken into account for the purpose of disallowance under section 37(3A) of the Income Tax Act, 1961? Learned counsel for the revenue points out that question of disallowance of commission on sales has been earlier gone into by this court in the case of CIT Vs. M/S Knit Fo
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