Kerala High Court
Periakaramalai Tea And Produce Co. Ltd. vs Commissioner Of Income-Tax on 11 September, 1991
Equivalent citations: [1993]199ITR100(KER)
Author: K.S. Paripoornan
Bench: K.S. Paripoornan
JUDGMENT K.S. Paripoornan, J.
1. This batch of four original petitions is filed by the same assessee to income-tax. The petitions are filed under Section 256(2) of the Income-tax Act, 1961 (in short, "the Act"), praying for a direction that the questions/question formulated in paragraph 4 of the original petitions may be directed to be referred to this court by the Income-tax Appellate Tribunal (in short, "the Tribunal"). In Original Petition No. 9262 of 1989, two questions have been formulated, whereas, in the other three original petitions, only one question is formulated. The second question in Original Petition No. 9262 of 1989 and the sole question in the other original petitions are the same. Therefore, it is sufficient to extract the two questions formulated in paragraph 4 of the Original Petition No. 9262 of 1989. They are as follows :
" (i) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in confirming the order of the Commissioner of Income-tax (Appeals) holding that the entire expenditure incurred on the maintenance of bungalows and one-third of the expenditure incurred on the maintenance of motor cars were includible in the computation of disallowance under Section 40A(5) ?
(ii) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the liability to surtax was not deductible in the computation of income?"
2. We heard counsel. The only aspect that arises for consideration is whether there is any referable question of law that has been posed by the petitioner. The first question formulated in Original Petition No. 9262 of 1989 is covered by a Full Bench decision of this court in CIT v. Forbes, Ewart and Figgis (P.) Ltd. [1982] 138 ITR 1 [FB]. In so far as the matter is covered by a Full Bench decision of this court, we do not think that any referable question of law arises. Subsequent to the decision of the Full Bench of this court, there is no decision of the Supreme Court on that aspect. The decision by the Full Bench of this court is binding on us. So we hold that question No. 1 in Original Petition No. 9262 of 1989 is not a referable question of law.
3. The second question in Original Petition No. 9262 of 1989 and the sole question in the other three cases is covered by a Full Bench decision of this court in A.V. Thomas and Co. Ltd. v. CIT[1986] 159 ITR 431 [FB]. The Full Bench has taken the view that surtax is a charge on income and is a levy on the profits and gains of the business. It is not an expenditure laid out or expended for purposes of business and so not an allowable deduction under Section 37 or Section 40(a)(ii) of the Income tax Act, 1961. In view of the above Full Bench decision of this court in A. V. Thomas and Co. Ltd.'s case [1986] 159 ITR 431 [FB], we are of the view that question No. (ii) in Original Petition No. 9262 of 1989 and the sole question in the other three original petitions cannot be said to be a referable question of law. In all the cases, the questions/question posed for consideration are covered by the Full Bench decisions of this court-- Forbes, Ewart and Figgis (P.) Ltd.'s case [1982] 138 ITR 1 [FB] and A.V. Thomas and Co. Ltd.'s case [1986] 159 ITR 431 [FB], against the assessee. So they are not referable questions of law. The answers to the questions, formulated in the original petitions, are self-evident, in view of the Full Bench decisions aforesaid. Therefore, we hold that there is no merit in these original petitions. They are dismissed.