M/S. PROCTOR and GAMBLE INDIA LTD. vs. THE C.I.T. B.C. V

ITR/3/2000HC Bombay18 March 2009Bench: HON'BLE SHRI JUSTICE F.I. REBELLO, HON'BLE SHRI JUSTICE R.S. MOHITE3 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court addressed each question based on concessions made by counsel and prior judgments. For question 1(a), concerning expenses for tools and implements, the assessee's counsel conceded that these pertained to distillation services. The Court answered this question in the affirmative and against the assessee, referencing a prior judgment in Income Tax Reference No. 315 of 1988 involving the same assessee and similar facts. For questions 1(b) and 1(c), relating to transportation services and depreciation on distillation assets, the Court answered them in the affirmative and against the assessee, citing its judgment in Income Tax Reference No. 3 of 1998, which also dealt with the same assessee and similar facts. Regarding question 2, raised by the revenue concerning the applicability of Rule 6 limits, the revenue's counsel conceded that the issue had been decided in the negative, in favour of the revenue, by this Court in CIT Vs. Aorow India Ltd., reported in 229 ITR 325. The Court found the issue covered by this judgment and answered it in the negative, in favour of the assessee. The reference was disposed of with no orders as to costs.

What were the facts?

This case involves an Income Tax Reference (L) No. 156 of 1993 before the Bombay High Court, concerning M/s. Procter & Gamble India Ltd. (previously Richardson Hindustan Ltd.) as the applicant assessee and the Commissioner of Income-tax, Bombay City-V, as the respondent revenue. The reference pertains to assessment year(s) not explicitly stated but implied to be related to the period for which the Tribunal's order was passed. The core of the matter is the Tribunal's decision on the assessee's claim for weighted deduction under Section 35C of the Income Tax Act, 1961, and the revenue's claim regarding the applicability of limits under Rule 6 of the Income Tax Rules, 1961. The procedural history involves questions of law being referred to the High Court by both the assessee and the revenue.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in rejecting the claim of the assessee company for weighted deduction under Section 35C for: (a) expenses of Rs. 3,76,439/- incurred under the head provision of tools and implements for use by farmers; (b) expenses of Rs. 55,999/- under the head transportation services provided to farmers; (c) depreciation of Rs. 57,723/- on distillation assets? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in rejecting the claim of the assessee that for the purpose of computing disallowance under Rule 6 of the Income-tax Rules, 1961, limits as were in force on 1.4.1981 were applicable throughout the previous year relevant to the assessment year 1981-82? Assessee's Contentions (implied by the questions referred): The assessee contended that the expenses for tools and implements, transportation services, and depreciation on distillation assets were eligible for weighted deduction under Section 35C. Revenue's Contentions (implied by the questions referred): The revenue contended that the limits in force on 1.4.1981 under Rule 6 of the Income-tax Rules, 1961, were applicable for computing disallowance for the entire previous year relevant to assessment year 1981-82.

Which sections of the Income-tax Act were involved?

Section 35C, Rule 6

AI-generated summary — verify with the full judgment below

K.J. IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX REFERENCE (L) NO.156 OF 1993 M/s.Procter & Gamble India Ltd., ) (Previously known as Richardson ) Hindustan) Ltd., Tiecion House, ) Dr.E.Moses Road, Bombay-11 )..Applicant V/s. The Commissioner of Income-tax ) Bombay City-V, Bombay ) Bombay-400 011 )..Respondent ---- Mr.P.S.Sahadevan for the respondent. Mr.J.D.Mistry with Ms.Payal Parikh, Ms.Nikita Kadam i/by M & M Legal Venture for the applicant. ---- Coram : F.I.Rebello & R.S.Mohite,JJ Date : 18.3.2009. Judgment :- (Per : R.S.Mohite,J) 1. The questions of law referred to this Court under Section 156(1) of the Income-tax Act are as under :- At the behest of the assessee :- 1. "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in rejecting the claim of the assessee company for weighted deduction under section 35C (a) expenses of Rs.3,76,439/- incurred under the head provision of tools and implements for use by farmers ; (b) Expenses of Rs.55,999/- under the head transportation services provided of farmers ; (c) Depreciation of Rs.57,723/- on Distillation assets ? CNR No : HCBM020174991993 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:49:00

: 2 : At the behest of revenue :- 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in rejecting the claim of the assessee that for the purpose of computing disallowance under Rule 6 of the Income-tax Rules, 1961 limits as were in force on 1.4.81 were applicable through out the previous year relevant to the assessment year 1981-82 ? 2. As regards question no.1(a), Counsel appearing for the applicant conceded that the record indicates that the "tools & implements" as mentioned in the question pertain to the grant of distillation services. Read thus, the question has been answered by us in the judgment and order dated 18.3.2009 passed in Income Tax Reference No.315 of 1988. The said judgment and order was passed in a reference involving the same assessee and arising out of similar background of facts. In the circumstances, question no.1(a) is answered in the affirmative and against the assessee. 3. Question nos.1(b) and 1(c) have been answered by us by a judgment and order dated 18.3.2009 passed in Income Tax Reference No.3 of 1998. The said reference concerned the same assessee and arose out of similar background of facts. In the circumstances, for the reasons given in our judgment passed in Income Tax Reference No.3 of 1998, question nos.1(b) & 1(c) are answered in the affirmative and against the assessee. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:49:00

: 3 : 4. In so far as question no.2 raised at the behest of the revenue, Counsel conceded that the issue has been decided in the negative, in favour of revenue by the judgment and order of this Court in the case of CIT Vs. Aorow India Ltd., reported in 229 ITR CIT Vs. Aorow India Ltd., reported in 229 ITR CIT Vs. Aorow India Ltd., reported in 229 ITR 325. 325. 325. On perusal of the judgment, we find that the issue is covered by the judgment. The question is therefore, answered in the negative and in favour of the assessee. In view of the answers given above, reference is disposed off with no orders as to costs. (R.S.Mohite,J) (F.I.Rebello,J) Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:49:00 Powered by TCPDF (www.tcpdf.org)

Recent GST High Court judgments

Search GST case law →