Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment years 1991-92 to 1995-96 - Assessees, Government owned companies, claimed deduction in respect of service charges paid to Government on demand but said claims were rejected by both Assessing Officer and Commissioner (Appeals) - However, Tribunal allowed those claims on basis of Government letter to that effect and observed that each assessment is independent and matter has to be decided from year to year independently on facts and circumstances of each case and ignored binding decision of co-ordinate Bench - Whether since Tribunal had decided issue based on Government letter, without anything more, it applied to subsequent years also and Tribunal was not justified in distinguishing earlier decision of Tribunal - Held, yes - Whether there must be basis for demand of service charges made in Government orders and said basis had to be found out either from Government orders or from discussion, deliberation, correspondence and other things arising between assessee-companies with Government itself - Held, yes - Whether since neither Assessing Officer nor other appellate authorities had seen Government orders, particularly earliest Government order referred to in letter extracted in Tribunal's order, Assessing Officer would consider matter afresh with reference to those Government orders and circumstances under which those Government orders happened to be issued - Held, yes FACTS The assessees were the Government-owned companies. The Government as per different executive orders demanded service charges from the assessee-companies based on certain percentage of the production. In the assessment for the concerned assessment years, the assessee-companies claimed deduction of the service charges paid to the Government under section 37. The Assessing Officer rejected the claim of the assessees holding that no special services were rendered by the Government to the assessee-companies and that service charges could not be allowed as expenditure laid out wholly and exclusively for the purpose of the business. On appeal, the Commissioner (Appeals) confirmed the order of the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492