1998 (4) TMI 23

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..... --had a manufacturing and a trading unit. In the manufacturing unit, the assessee-company was manufacturing motors, pump sets and allied electrical products. In the trading unit, apart from selling items manufactured by the assessee-company, it was also selling goods manufactured by others. On April 21, 1977, the manufacturing unit of the assessee had been closed down and as a consequence, the a .....

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..... Income-tax, accordingly, directed the Income-tax Officer to recompute the income of the assessee. On appeal by the assessee-company, the Income-tax Appellate Tribunal agreed with the Commissioner of Income-tax that the manufacturing unit of the assessee-company had been closed down and not temporarily suspended as contended by the assessee, that the expenditure on compensation related to the cl .....

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..... ection 25FFF of the Industrial Disputes Act, 1947, is not allowable as revenue expenditure ?" Arguments of Mrs. Aparna Nandakumar, learned counsel representing Mr. R. Venkataraman, learned counsel appearing for the applicant, and of Mr. R. Sivaraman, learned counsel representing Mr. C. V. Rajan, learned junior standing counsel, representing the Revenue, were heard. It is not as if the question .....

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..... and the payments to the workers were made thereafter. The claim of the assessees to deduct the payments made to the workers in its assessment for 1967-68, relevant for the year ended April 13, 1967, was rejected by the Departmental authorities and the Tribunal. On a reference to this court, at the instance of the assessee, this court held that the scheme of the relevant section 25FFF of the Indu .....

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..... i Cashew Sales Corporation [1967] 65 ITR 643. It goes without saying, in the face of the decision cited above, that the Income-tax Appellate Tribunal has rightly held that the compensation paid by the assessee-company to its workers pursuant to the award dated September 30, 1978, of the Industrial Tribunal under section 25FFF of the Industrial Disputes Act, 1947, is not allowable as a revenue ex .....

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