SH.T.B MEHTA vs. C.I.T PATIALA

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ITR/88/1997HC Punjab & HaryanaPHHC01035464199702 November 2006Bench: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue was covered in favour of the revenue and against the assessee by its own previous judgment in B.M. Parmar v. C.I.T. (1999) 235 ITR 679. Furthermore, the Court referred to its recent judgment dated September 5, 2006, in I.T.R. No. 15 of 1995 (The Commissioner of Income Tax, Haryana, Rohtak v. Kamal Kishore Batra DO, LIC, Kalanaur, Rohtak), where a similar question was answered in favour of the revenue and against the assessee. Consequently, the High Court answered the referred question in favour of the revenue and against the assessee. The operative direction was to answer the reference accordingly. No issue was expressly left undecided.

What were the facts?

This case involves a reference of a question of law to the High Court of Punjab and Haryana at Chandigarh by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The reference arises from the ITAT's order dated January 16, 1997, concerning Income Tax Appeals (ITAs) Nos. 1176, 1177, 1179, and 1180 of 1991. The assessment years in question are 1987-88 and 1988-89. The dispute centers on the disallowance of a deduction claimed by the assessee, identified as a Development Officer of the Life Insurance Corporation of India, for expenses amounting to 40% of the incentive bonus received. The revenue is the Commissioner of Income Tax, Patiala.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in disallowing the deduction of 40% as expenses out of the incentive bonus received by the assessee as a Development Officer of the Life Insurance Corporation of India? (Question of law) Assessee's contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the fact that the assessee claimed a deduction of 40% as expenses implies an argument that such expenses were incurred in earning the incentive bonus. Revenue's contentions: The revenue's position, as indicated by the High Court's decision, is that the deduction should be disallowed. The revenue relies on previous judgments of the High Court in support of its stance.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. No.88 of 1997 Date of decision: 02.11.2006 Shri T.B. Mehta, Chandigarh & Ors. -----Applicants Vs. Commissioner of Income Tax, Patiala. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Dr. N.L. Sharda, Advocate for the revenue. ----- ORDER: Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, arising out of its order dated 16.01.1997 in I.T.A. Nos1176, 1177, 1179 and 1180/Chandi/91 in respect of assessment years 1987-88 and 1988-89:- “Whether on the facts and in the circumstances of the case, the Tribunal was right in law in disallowing the deduction @ 40% as expenses out of the incentive bonus received by the assessee as Development Officer of Life Insurance Corporation of India?” We find that the issue stands covered in favour of the revenue and against the assessee by the judgment of this Court in B.M. Parmar v. C.I.T. (1999) 235 ITR 679. In our recent judgment dated 5.9.2006 in I.T.R. No.15 of 1995 (The Commissioner of Income Tax, Haryana, Rohtak v. Kamal Kishore Batra DO, LIC, Kalanaur, Rohtak), we have answered the question in favour of the revenue and against the assessee. Accordingly, the question referred is answered in favour of the revenue and against the assessee. ( ADARSH KUMAR GOEL ) JUDGE November 02, 2006 ( RAJESH BINDAL )

ashwani JUDGE P

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