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1987 Supreme(SC) 542
SUPREME COURT OF INDIA
R.S. PATHAK , CJI., RANGANATH MISRA AND B.C. RAY, JJ.
Civil Appeal No. of 1987 (arising out of S.L.P. (C) No. 1297 of 1976); (with C.A. No. of 1987 arising out of S.L.P. (C) No. 4327of 1977); Civil Appeal No. 113 of 1975 (with C.A. No. 1534 of 1977 ); Civil Appeal No. of 1987 (arising out of S.L.P. (C) Nos. 651-53 of 1977( and Civil Appeal No. 1090 of 1976, D/- 14-7-1987.
Commissioner of Income tax, Bombay, Appellant
Versus
Cannon Dunkerley and Co. Ltd., etc. etc., Respondents.
AND
Commissioner of Income-tax, Bombay , Appellant
Versus
Textile Engineering and Trading Co., Respondent.
AND
Commissioner of Income-tax, Bombay Appellant
Versus
R.M.D.C. Press Ltd., Respondent.
AND
Commissioner of Income-tax, Bombay, Appellant
Versus
M/s. Hoechest Dye and Chemicals, Respondent.
A.K.VERMA, A.Subhashini, B.B.Ahuja, JOEL PERES, SOLI J.SORABJI, T.A.Ramachandran
Headnote:
Income-tax Act,1961 - Section 256(2)(1), 37(1) - Income-Tax - Computing Business Income - These are appeals by special leave and impugned order in each of these appeals is of High Court rejecting application of Commissioner of Income-tax, Bombay under S. 256(2), Income-tax Act of 1961 - As in our opinion a question of law does arise out of he appellate order of Tribunal in each of cases, Tribunal should have allowed application under S. 256(1) of Act and when that was refused and High Court was moved, High Court should have allowed several applications under S. 256(2) of Act and directed Tribunal to state a case and refer appropriate question for opinion of High Court - Whether on facts and in circumstances of case, Tribunal was right in holding that expenditure by way of secret commission was deductible under S. 37(1) of Act in computing business income of assessee – Held, Since Court is directing a statement to be called for and question to be referred, court refrain from expressing any opinion which might prejudice either of parties before High Court - Court allow appeals, vacate orders of Tribunal as also of High Court confined to question of reference and direct following question to be referred by Tribunal to High Court for its opinion – Appeal Allowed.
Judgement
RANGANATH MISRA, J. :- These are appeals by special leave and the impugned order in each of these appeals is of the Bombay High Court rejecting the application of the Commissioner of Income-tax, Bombay under S. 256(2), Income-tax Act of 1961. As in our opinion a question of law does arise out of he appellate order of the Tribunal in each of the cases, the Tribunal should have allowed the application under S. 256(1) of the Act and when that was refused and the High Court was moved, the High Court should have allowed the several applications under S. 256(2) of the Act and directed the Tribunal to state a case and refer the appropriate question for the opinion of the High Court.
2. Since we are directing a statement to be called for and the question to be referred, we refrain from expressing any opinion which might prejudice either of the parties before the High Court. We allow the appeals, vacate the orders of the Tribunal as also of the High Court confined to the question of reference and direct the following question to be referred by the Tribunal to the High Court for its opinion :
"Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the expenditure by way of secret commission was deductible under S. 37(1) of the Act in computing the business income of the assessee ?"
Appeals allowed
