ELSCOPE (P) LTD. Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference in fact encompasses two cross references: one by the assessee (R.A. No. 381/Ahd/1993), and another by the Revenue (R.A. Nos. 413 and 414/Ahd/1993).

(2.) THE question, at the instance of the assessee, has been referred by Tribunal, Ahmedabad Bench 'B' under Section 256(1) of the IT Act, 1961 (the Act):

(3.) HEARD Mr. B.D. Karia, learned advocate for the assessee and Mr. M.R. Bhatt, learned senior standing counsel for the Revenue. In relation to the question referred at the instance of the assessee it is an accepted position between the parties that the same is concluded by decision of the apex Court in the case of Addl. CIT v. Akkamamba Textiles Ltd. : [1997]227ITR464(SC) . In the circumstances, it is not necessary to set out the facts and contentions in detail. In light of the ratio laid down by the apex Court decision in the aforesaid case, the question referred at the instance of the assessee is answered in the negative i.e. in favour of the assessee and against the Revenue. The Tribunal was not justified in confirming the disallowance of guarantee commission of Rs. 3,16,668.