COMMISSIONER OF INCOME TAX Vs. RAIPUR MANUFACTURING COMPANY

JUDGEMENT

(1.) AT the instance of Revenue, the following questions of law have been referred to this Court by the Tribunal, Ahmedabad Bench, 'B', arising from its order in ITA No. 1494/Ahd/81, in respect of the asst. yr. 1978 -79.

(2.) AS far as Question No. 1 is concerned, the same arises from the assessee's claim for deduction of sum of Rs. 19,449 as royalty payment for the use of trade mark 'Tebilized'. The ITO disallowed the claim. In appeal the CIT upheld the contention of the assessee and allowed the deduction holding it to be revenue expenditure. The Tribunal upheld the decision of the CIT(A).

(3.) AS far as question No. 2 is concerned, the facts are that the ITO while determining the value of remuneration for the purpose of disallowance under s. 40(c) of the IT Act ('Act' for short) included the reimbursement of medical expenses for the managing director. In appeal, the CIT(A) directed the ITO to exclude a sum of Rs. 9,918 being reimbursement of medical expenses in computing the remuneration paid to the managing director under s. 40(c) of the IT Act. In appeal preferred by the Revenue, the Tribunal upheld the decision of the CIT(A). At the instance of the Revenue, therefore, the above question No. 2 has been referred to this Court under s. 256(1) of the Act.