JUDGMENT

The Judgment of the Court was delivered by

VENKATACHALA, J. - These are the appeals of the Revenue arising from different judgments of the Gujarat High Court delivered on References made at its instance under Section 256(1) of the Income Tax Act, 1961, to be referred to as the I.T. Act, on obtaining certificates of fitness to appeal to this Court. As the decision to be rendered by us in Civil Appeal No. 2149 (NT) of 1977 could form the basis for disposal of the remaining appeals, we shall proceed to consider that appeal and decide it at the first instance.

Civil Appeal No. 2149(NT) of 1977 - C.I.T. v. Mihir Textiles Ltd. (1977 Tax LR 586 : 104 ITR 167 (Guj HC)) :

2. This appeal arises from the judgment in Income Tax Reference No. 175 of 1976 decided by the Gujarat High Court. The questions referred by the Tribunal under Section 256(1) of the I.T. Act for opinion of the High Court in that Reference, were these :

(1) Whether, the payment made to the Textile Commissioner by the assessee for contravention of the direction given by the Textile Commissioner was in the nature of penalty and not incidental to the carrying on of the assessees business ?

(2) Whether, on the facts an