SLM MANEKLAL INDUSTRIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) : The Tribunal has referred the following two questions to this Court under s. 256(1) of the IT Act, 1961 :

(2.) FOLLOWING the decision in CIT vs. Vallabh Glass Works Ltd. (1981) 25 CTR (Guj) 254 : (1982) 137 ITR 389 (Guj), we answer the question by stating that bank guarantee commission is capital expenditure. Therefore, question No. 1 is answered against the assessee and in favour of the Revenue. Question No. 2 is answered in the negative, that is in favour of the assessee (sic) and against the Revenue (sic) following the decision in SLM Maneklal Industries vs. CIT (1988) 70 CTR (Guj) 180 : (1988) 172 ITR 176 (Guj). The reference is disposed of accordingly with no order as to costs.