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TMI Blog1966 (9) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... e been used by the appellant as well as by the Tribunal only because the dispute related to a sum which had been deducted by the Government of Orissa as a penalty from the amount due to the appellant for the supplies made by him in pursuance of the agreement. The High Court, therefore, in answering the question referred to it, should not have gone into the question of the applicability of section 10(2)(xv) of the Act at all, and should have confined itself to deciding whether this amount deducted from the claims of the assessee by the Government of Orissa was liable to be excluded when computing the income under section 10(1) of the Act. The decision given by the High Court is, therefore, liable to be quashed and a direction is necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the bills. The appellant claimed deduction of this amount from the assessable income under section 10(1) of the Income-tax Act. The claim was negatived by the Income-tax Officer and the Appellate Assistant Commissioner, but was accepted by the Income-tax Appellate Tribunal. The Tribunal held that this amount of Rs. 25,700 deducted by the Government from the bills of the appellant could not be brought to tax in view of section 10(1) of the Income-tax Act. Thereupon, the Commissioner of Income-tax asked for a reference to the High Court, and the Tribunal under section 66(1) of the Income-tax Act referred the following question for the opinion of the High Court : "Whether, on the facts and in the circumstances of the case, the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 10(1) of the Income-tax Act. The question was, no doubt, framed in rather unfortunate language, because section 10(1) of the Income-tax Act does not refer to any deduction. Section 10(1) lays down that the tax shall be payable by an assessee under the head " profits and gains of business, profession or vocation " in respect of the profits or gains of any business, profession or vocation carried on by him. In these circumstances, what the appellant had claimed was that, in the computation of profits and gains of business, profession or vocation under section 10(1) of the Act, this amount should be deducted, which was intended to mean that this amount should not be included in the computation of the profits and gains of the business. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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