Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1981-82 - Assessee, a bus operator, was maintaining accounts on mercantile basis - During relevant assessment year, he was served with demand notice for a sum as amount of motor vehicle tax due to State Government - Assessee made provision for payment of sum and claimed it as deduction - Tribunal allowed assessee's claim - Whether order of Tribunal was justified - Held, yes FACTS The assessee was a bus operator during the relevant assessment year. In that year, he was served with a demand notice for sum as the amount of motor vehicle tax due to the State Government. The assessee made a provision for the payment of the sum and claimed it as deduction, as the assessee was maintaining accounts on the mercantile basis. The claim of the assessee was rejected by the ITO. The Commissioner (Appeals) as well as the Tribunal allowed the claim of assessee. On reference : HELD In view of the decision of the Supreme Court Kedarnath Jute Manufacturing Co. Ltd. v. CIT [1971] 82 ITR 363, the Tribunal was right in law in holding that the entire sum being the motor vehicle tax demanded by the State Government was an admissible deduction in the computation of the assessee's income for the relevant assessment year. Note : The case was decided in favour of the assessee. CASES REFERRED TO Kedarnath Jute Manufacturing Co. Ltd. v. CIT [1971] 82 ITR 363 (SC) and CIT v. East India Corporation Ltd. [1986] 159 ITR 712(Mad.). T.C.A. Ramanujam for the Applicant. N. Devanathan for the Respondent. JUDGMENT R. Jayasimha Babu, J.- The reference is at the instance of the Revenue. The assessment year is 1981-82. The question referred is : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the entire sum of Rs. 2,28,907 being the vehicle tax demanded by the Regional Transport Office was an admissible deduction in the computation of the assessee's income for the assessment year 1980-81 ?" The assessee was a…

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