THE COMMISSIONER OF INCOME TAX vs. GAJRA GEARS LTD

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ITA/52/1999HC Bombay05 March 2007Bench: HON'BLE SHRI JUSTICE DR. S. RADHAKRISHNAN, HON'BLE SHRI JUSTICE J.P. DEVADHAR1 pages
AI SummaryAllowed

What did the High Court hold?

The Bombay High Court acknowledged that the substantial question of law involved the interpretation of Section 37(3A) of the Income Tax Act concerning the disallowance of 'Target Bonus'. The Court noted the existence of judgments from various High Courts on this issue. However, it specifically observed that the Bombay High Court itself had not yet decided this particular question. In light of this, the High Court directed that a 'Statement of the Case' be called for. The application was consequently allowed, indicating a procedural step rather than a decision on the merits of the substantial question of law.

What were the facts?

The Commissioner of Income Tax, Mumbai City V (the Revenue) filed an Income Tax Application No. 52 of 1999 before the Bombay High Court. The application pertains to the Assessment Year 1984-1985 and concerns an order passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had excluded an amount of Rs. 26,54,988/- representing 'Target Bonus' from the purview of disallowance under Section 37(3A) of the Income Tax Act. The application was admitted on April 22, 1999, on a substantial question of law. The High Court noted that while several High Courts had decided similar issues, its own High Court had not yet ruled on the matter.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Honourable ITAT has erred in excluding Target Bonus amounting to Rs. 26,54,988/- from the purview of disallowance under section 37(3A) relying on the decision of Calcutta High Court in the case of CIT V/s. Bata India Ltd.? Assessee's Contention: The judgment does not record any specific contentions made by the assessee, Gajra Gears Ltd. Revenue's Contention: The Revenue contended that the ITAT erred in excluding the Target Bonus from disallowance under Section 37(3A), relying on the Calcutta High Court's decision in CIT V/s. Bata India Ltd.

Which sections of the Income-tax Act were involved?

Section 37(3A)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPLICATION NO.52 OF 1999 INCOME TAX APPLICATION NO.52 OF 1999 INCOME TAX APPLICATION NO.52 OF 1999 The Commissioner of Income Tax, Mumbai City V, Mumbai .. Petitioner V/s Gajra Gears Ltd. .. Respondent Mr.A.N.Kotangale for the Petitioner. Mr.S.N.Inamdar for the Respondent.

CORAM : DR.S.RADHAKRISHNAN CORAM : DR.S.RADHAKRISHNAN CORAM : DR.S.RADHAKRISHNAN & J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ.

DATE : 5th March, 2007. DATE : 5th March, 2007. DATE : 5th March, 2007. JUDGMENT: JUDGMENT: JUDGMENT: (PER DR.S.RADHAKRISHNAN,J.) (PER DR.S.RADHAKRISHNAN,J.) (PER DR.S.RADHAKRISHNAN,J.) 1. Heard the learned Counsel for the parties. This Application pertains to the Assessment Year 1984-1985. This Application was admitted on 22.4.1999 on the following substantial question of law:- "Whether on the facts and in the circumstances of the case and in law, the Honourable ITAT has erred in excluding Target Bonus amounting to Rs.26,54,988/- from the purview of disallowance under section 37(3A) relying on the decision of Calcutta High Court in the case of CIT V/s.Bata India Ltd.?" 2. There are several judgments from different High Courts. However, our High Court has not decided the issue. In view thereof, "Statement of the Case" is called for. Application stands allowed. (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.) CNR No : HCBM020008531999 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:59:27 Powered by TCPDF (www.tcpdf.org)

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