1994 (9) TMI 41 - HC - Income Tax

Accounting Year Application For Reference Assessing Officer Business Expenditure Business Income Income Tax Act Interest On Borrowed Capital Question Of Law Reference Application

Summary

Issues:
1. Disallowance of interest on borrowed money utilized in granting interest-free advances.
2. Disallowance of retainership fee and car expenses.
3. Allowability of a specific sum under different sections of the Income-tax Act.
4. Applicability of rule 6D to a foreign technician who is not an employee.
5. Treatment of charity collections as trading receipts.
6. Allowability of presentations expenses.
7. Disallowance of commission paid to a specific entity.
8. Relief under section 80J for a specific unit.
9. Revision of depreciation computation based on previous appeal orders.

Analysis:
1. The court directed the Tribunal to refer question No. 1 regarding the disallowance of interest on borrowed money for opinion, as a similar reference had been made in an earlier case for the same assessee.

2. Questions 2, 3, 7, 8, and 9 were not considered fit for reference as similar questions for earlier assessment years had been declined by the Allahabad High Court in related cases involving the same assessee.

3. Regarding question No. 4, the court rejected the Revenue's submission that rule 6D applies to foreign technicians who are not employees, agreeing with the earlier decision that the rule does not apply to such individuals.

4. The controversy in question No. 5 revolved around treating charity collections as trading receipts. The court declined to refer this question, citing previous decisions and the lack of applicability of recent Supreme Court observations to the case.

5. Question No. 6 was deemed not fit for reference as similar questions were not raised for previous assessment years and the Assessing Officer allowed similar expenditure in a subsequent year.

6. The court directed the Tribunal to refer question No. 1 for further opinion but did not order any costs related to the judgment.