C.I.T., Bombay Vs. Cannon Dunkerley & Co. Ltd. etc. etc.
EmailAppeal: (with C.A. No. 87 @ SLP (C) No. 4327/77)
(Arising out of S.L.P. (C) No. 1297/76)
(Arising out of S.L.P. (C) No. 1297/76)
Petitioner: C.I.T., Bombay
Respondent: Cannon Dunkerley & Co. Ltd. etc. etc.
Apeal: (with C.A. No. 87 @ SLP (C) No. 4327/77)
(Arising out of S.L.P. (C) No. 1297/76)
(Arising out of S.L.P. (C) No. 1297/76)
Judges: R.S. PATHAK, CJI., RANGANATH MISRA & B.C. RAY,JJ.
Date of Judgment: Jul 14, 1987
Head Note:
INCOME-TAX ACT, 1961:
Section 256 – Reference – Whether expenditure by way of secret commission was deductible under Section 37(1) – Question of law does arise out of the appellate order – Tribunal directed to refer the question to the High Court.
JUDGEMENT:
RANGANATH MISRA, J.
1. 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 section 256(2) of the Income-tax Act of 1961. As in our opinion a question of law does arise out of the appellate order of the Tribunal in each of the cases, the Tribunal should have allowed the application under Section 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 Section 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 an 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 Section 37(1) of the Act in computing the business income of the assessee?”
Appeal allowed.
1. 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 section 256(2) of the Income-tax Act of 1961. As in our opinion a question of law does arise out of the appellate order of the Tribunal in each of the cases, the Tribunal should have allowed the application under Section 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 Section 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 an 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 Section 37(1) of the Act in computing the business income of the assessee?”
Appeal allowed.
