Calcutta High Court
Commissioner Of Income-Tax vs Price Waterhouse on 31 May, 1993
Equivalent citations: [1994]207ITR564(CAL)
JUDGMENT Ajit K. Sengupta, J.
1. In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1985-86, the following question of law has been referred to this court :
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the order of the Commissioner of Income-tax (Appeals) for modification of the order of the Assessing Officer in respect of the disallowance made under Section 37(3A) of the Income-tax Act, 1961, according to the correct interpretation of law ?"
2. The facts relating to this reference are that the Assessing Officer had excluded Rs. 2,56,286 on account of repairs, etc., of motor cars from the motor car expenses in calculating the disallowance under Section 37(3A) which amounted to Rs. 64,688.
3. At the time of passing the appellate order, the Commissioner of Income-tax (Appeals) enhanced the disallowance under Section 37(3A) of the Act. He directed the Assessing Officer to modify the assessment after making fresh calculation of actual disallowance under Section 37(3A) including Rs. 2,56,286.
4. On further appeal by the assessee against the order of the Commissioner of Income-tax (Appeals), the Tribunal had allowed the assessee's appeal following certain judicial pronouncements. The Tribunal, following the decision of the Bombay High Court in the case of CIT v. Chase Bright Steel Ltd. (No. 1) [1989] 177 ITR 124, held that the expenses covered by Sections 30 and 31 of the Act could not be disallowed under Section 37(3A) of the Act.
5. It is not in dispute that the question in this reference is concluded by the decision of this court in Income-tax Reference No. 124 of 1988 in the case of CIT v. Tungabhadra Industries Ltd. , in which judgment was delivered on November 28, 1991.
6. Following the said decision, we answer this question in this reference in the affirmative and in favour of the assessee.
7. There will be no order as to costs.
Nure Alam Chowdhury, J.
I agree.