VIJAY MILLS COMPANY LIMITED vs. COMMISSIONER OF INCOME TAX

ITR/39/1984HC GujaratGJHC24011714198430 January 1997Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE R.BALIA2 pages
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What were the facts?

This case concerns Income Tax Reference No. 39 of 1984 before the High Court of Gujarat at Ahmedabad. The reference was made at the instance of the assessee, Vijay Mills Company Limited, by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A'. The assessment year in question is 1975-76. The High Court was asked to provide its opinion on two specific questions of law referred to it. The procedural history leading to this reference involves the Tribunal's decision on the two issues, which the assessee then sought to challenge via a reference to the High Court.

What did the High Court hold?

The High Court held that the Tribunal was justified in law in its findings on both questions. For the first question regarding gratuity liability, the learned counsel for the assessee candidly conceded that the issue stood concluded in favour of the Revenue, citing the precedent of Shri Sajjan Mills Limited v. C.I.T., 156 ITR 585. For the second question concerning guarantee commission, the court noted that this issue was also decided against the assessee by a Division Bench of the same court in CIT v. Vallabh Glass Works Ltd., 137 ITR 389. Consequently, both questions were answered in the affirmative, meaning in favour of the Revenue and against the assessee. No order as to costs was made.

What were the issues?

The High Court was asked to decide the following questions of law: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the appellant was not entitled to claim gratuity liability of Rs. 13,69,493/- under Section 28 read with Section 37 of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the appellant was not entitled to claim guarantee commission of Rs. 1,27,927/- under Section 28 read with Section 37 of the Act? Arguments: Assessee: The assessee sought to challenge the Tribunal's findings on both issues, implying they believed they were entitled to claim these expenses. Revenue: The revenue's position, as indicated by the court's decision, was that the assessee was not entitled to these claims.

Which sections of the Income-tax Act were involved?

Section 28,Section 37

AI-generated summary — verify with the full judgment below

.FO 1 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 39 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE R.BALIA. ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements? - No. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ

2.

To be referred to the Reporter or not? - No. JJJJJJJJJJJJJJJJJ

3.

Whether Their Lordships wish to see the fair copy of the judgement? - No. JJJJJJJJJJJJJJJJJJJJJJJJJJ

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?-No.

The order continues below.

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