COMMISSIONER OF INCOME TAX V. ARVIND MILLS LTD.

ITR/14/1994

AI Insights

The case involves the Commissioner of Income Tax as the petitioner and Arvind Mills Ltd. as the respondent, concerning disputes over certain additions made by the tax authorities in the assessment year 1985-86. The Income-tax Appellate Tribunal had made decisions on three specific issues: the deletion of an addition for tebilised royalty, the addition of travelling expenses, and the allowance of claims on provision for redemption of debentures. The High Court of Gujarat was asked to review these decisions. The court's rulings were based on precedents and interpretations of relevant tax laws, leading to a mixed outcome for the parties involved.

• Counselvise Citation: [2001] 140 COUNSELVISE.COM (IT) 718332 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 08-11-2001
• Assessment Year: misc
• Other Referred Cases: CIT vs. Ashoka Mills Ltd., Madras Industrial Investment Corporation Ltd. vs. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: MANISH SHAH
• Assessee Lawyers: AKIL KURESHI; MANISH BHATT
• Keywords: Travelling Expenses; Tebilised royalty; Provision on redemption of Debentures
• Section: 143(3)

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 14 of 1994 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 -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus ARVIND MILLS LTD. -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 14 of 1994 MR AKIL KURESHI with MR MANISH R BHATT for Petitioner MR MANISH J SHAH for Respondent -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE D.A.MEHTA Date of decision: 08/11/2001 ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH) In this reference at the instance of the revenue, the following questions have been referred by the Income-tax Appellate Tribunal, Ahmedabad for our opinion in respect of assessment year 1985-86 :- \"(1) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs.2,59,836/- for tebilised royalty ?\" (2) Whether the Appellate Tribunal is right in law and on facts in deleting addition of Rs.18,891/- made on account of Travelling Expenses ?\" (3) Whether the Appellate Tribunal is right in law and on facts in allowing the claims of the assessee for Rs.3,60,000/on account of provision on redemption of Debentures ?\" 2. We have heard Mr Akil Kureshi, learned counsel for the revenue and Mr Manish J Shah, learned counsel for the respondent-assessee. 3. As far as question No. 1 is concerned, our attention is invited to the decision of this Court in CIT vs. Ashoka Mills Ltd., 218 ITR 526 wherein this Court held in a similar case that payment of royalty for \"Tebilised\" was revenue expenditure. Following the said decision, our answer to question No. 1 is in the affirmative i.e. in favour of the assessee and against the revenue. 4. As far as question No. 2 is concerned, the learned counsel for the parties point out that similar question has been decided in favour of the revenue in Income-tax Reference No.54 of 1988 decided on 6.2.2001. Following the said decision, our answer to question No. 2 is in the negative i.e. in favour of the revenue and against the assessee. 5. Coming to question No. 3, the learned counsel for the parties point out that in the case of Madras Industrial Investment Corporation Ltd. vs. CIT, 225 ITR 802, similar question has been decided by the Supreme Court in favour of the assessee. Following the said decision, our answer to question No. 3 is in the affirmative i.e. in favour of the assessee and against the revenue. 6. The reference accordingly stands disposed of with no order as to costs. (M.S. Shah, J.) (D.A. Mehta, J.) sundar/- "