1990 (8) TMI 36 - HC - Income Tax

Carry Forward And Set Off, Cash Allowance, Depreciation, Developement Rebate, Income, New Industrial Undertaking, Salary, Special Deduction, Travelling Expenses

Summary

Issues:
1. Interpretation of revenue and capital expenditure on foreign tours and know-how fees.
2. Allowability of various expenses incurred for business purposes.
3. Depreciation and development rebate on plant and machinery.
4. Treatment of cash allowance to employees.
5. Relief under section 80J for specific divisions.
6. Treatment of security deposit for cops as income.

Analysis:

1. The petitioner sought reference on various expenditure decisions by the Income-tax Appellate Tribunal. The court determined that certain questions did not warrant reference as they were either factual findings or had been previously addressed in other cases. The court found that expenses related to foreign tours and business activities were rightly treated as revenue expenditure, thus not necessitating a reference.

2. The court declined reference on questions regarding the allowance of specific expenses, such as advertisement expenditure and excise duty liability, citing previous decisions and established principles. The court also noted that certain questions were already granted relief by the Income-tax Officer, hence not requiring further reference.

3. Issues relating to depreciation, development rebate, and specific rates for machinery were considered for reference. The court directed the Tribunal to refer these questions to the court for detailed examination, indicating a need for clarification and legal interpretation on these matters.

4. The treatment of cash allowance to employees was addressed by the court, emphasizing that such allowances should be considered part of the salary and not as separate perquisites. The court relied on precedent and established principles to make this determination.

5. Regarding relief under section 80J for specific divisions, the court directed the Tribunal to refer this question for further examination. The court highlighted the need to assess the eligibility of the assessee for relief under this section based on the specific circumstances of the case.

6. The court considered the treatment of security deposit for cops as income and found that it was not an integral part of the transaction of sale, thus not constituting income for the assessee. This decision was based on a thorough analysis of the facts and legal principles involved in the case.

In conclusion, the court directed the Tribunal to refer specific questions for further examination while providing detailed reasoning for the exclusion of certain questions from reference. The judgment reflects a comprehensive analysis of various expenditure, allowance, and relief issues under the Income-tax Act, emphasizing the importance of legal interpretation and precedent in tax matters.