ADPRINT SERVICES LTD. V. COMMISSIONER OF INCOME-TAX

ITR/25/1989

AI Insights

In the case of ADPRINT SERVICES LTD. versus COMMISSIONER OF INCOME-TAX, the High Court of Gujarat addressed two primary questions referred by the assessee concerning the assessment year 1979-80. The first question pertained to the disallowance of a gratuity liability of Rs.34,882 under sections 28 and 37 of the Income Tax Act, 1961. The second question concerned the disallowance of Rs.16,531 as Dealers Aid under section 37(3A) of the Act. The court referenced a similar case, Innosearch Ltd vs. CIT, 251 ITR 384, to support its decisions. The court concluded that both issues were factual in nature and did not give rise to substantial questions of law, thereby affirming the Tribunal's decisions without further legal interpretation.

• Counselvise Citation: [2001] 140 COUNSELVISE.COM (IT) 727336 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 04-10-2001
• Assessment Year: misc
• Other Referred Cases: Innosearch Ltd vs. CIT, 251 ITR 384
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: B B NAIK; MANISH BHATT
• Assessee Lawyers: R K PATEL
• Keywords: Assessment Year 1979-80; Dealers Aid; Disallowance; Gratuity liability
• Section: 37; 28; 37(3A)

Judgement Text

" )) IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 25 of 1989 For Approval and Signature: Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- ADPRINT SERVICES LTD. Versus COMMISSIONER OF INCOME-TAX -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 25 of 1989 MR RK PATEL for Petitioner No. 1 MR BB NAIK with MR MANISH R BHATT for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE D.A.MEHTA Date of decision: 04/10/2001 ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH) In this reference at the instance of the assessee, the following questions have been referred for the opinion of this Court in respect of assessment year 1979-80 :- \"(1) Whether on the facts and in the circumstances of the case, the Tribunal was justified in confirming the disallowance of gratuity liability of Rs.34,882/- claimed by the assessee u/s. 28 read with sec. 37 of the Act ? (2) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the lower authorities were justified in disallowing sum of Rs.16531/- (wrongly mentioned at Rs.33050/- in the order of the Tribunal) incurred by the assessee as Dealers Aid u/s. 37(3A) of the I.T. Act, 1961 ?\" 2. We have heard Mr RK Patel, learned counsel for the applicant-assessee and Mr BB Naik, learned counsel for the revenue. 3. Our attention is invited to the decision dated 29.4.1999 in Income-tax Reference No. 292 of 1984 between Innosearch Ltd vs. CIT, 251 ITR 384. 4. Having heard the learned counsel for the parties and having gone through the aforesaid decision, we see no reason not to follow the said decision. In view of the above, following the decision of this Court in 251 ITR 354, our answer to question No. 1 is in the affirmative i.e. in favour of the revenue and against the assessee. 5. As far as question No. 2 is concerned, in the aforesaid decision on similar facts, this Court expressed the view that on consideration of material whether a particular item is aimed to attract the consumer or is merely an aid to selling is a question of fact and does not give rise to a question of law. Since the Tribunal has come to a definite conclusion that expenses on these items are primarily aided to attract the consumer and is part of publicity expenditure and since this is a conclusion of fact, it does not give rise to any question of law. The learned counsel for the assessee concedes that the facts in the instant case are similar to the facts in the case of Innosearch Ltd. Accordingly, as answer to the question depends on the conclusion of fact reached by the Tribunal, we decline to answer the question since it, in our opinion, is not a question of law. 6. The reference accordingly stands disposed of with no order as to costs. (M.S. Shah, J.) (D.A. Mehta, J.) sundar/- "