STANDARD BATTERIES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioner seeks special leave to appeal directly from the order dated 1.01.1992, of the Income-tax Appellate tribunal, Bombay bench "A", Bombay, declining to state a case and refer a question of law for the opinion of the High court. Learned counsel for the Revenue raised an objection as to the maintainability in view of the fact that the petitioner seeks to by pass the procedure under section 256(2 of the Income-tax Act, 1961.

(2.) In the normal course, we should have declined to entertain the matter here. Sri Ganesh appearing for the petitioner says that the reference before the tribunal sought to invoke section 257 of the Income-tax Act, 1961. Sri Ganesh says that in view of this no objection that the petitioner did not have recourse to the drill of section 256(2) could be entertained.

(3.) Be that as it may, the question included is as to the nature of the levy under section 56(5) of the Bombay Sales Tax Act, 1959 . If the exaction partakes of the character of a penalty, its deductibility as an allowable business or revenue expenditure gets contested. If, on the other hand, it is compensatory in character, the claim admits of being considered as an allowable deduction subject to the other provisions of the Act.