COMMISSIONER OF INCOME TAX Vs. ARUNA MILLS LIMITED

JUDGEMENT

(1.) At the instance of the Revenue, the Income Tax Appellate Tribunal, Ahmedabad Bench 'C', has referred the following two questions, for our opinion, u/s 256(1) of the Income-tax Act, 1961, arising out of the order of the Tribunal dated 29.10.1983, in relation to A.Y. 1981-82.

(2.) We have heard the Learned Counsel appearing for the Revenue, whereas, none appeared for and on behalf of the respondent-assessee, though duly served.

(3.) Our attention was invited by the Learned Counsel for the Revenue to a decision of the Apex Court in C.I.T. v. Mafatlal Gangabhai & Co. P. Ltd.,.. The scope of sec. 40(a)(v) and sec. 40A(5) of the I.T. Act and also the provisions of sec. 40 and 40A, pertaining to the expenditure resulting in benefit, amenity or perquisite to employee, whether made in cash or not, have been extensively explored and succinctly propounded by the Hon'ble Supreme Court. The provisions of sec. 40A(5)(a)(ii) and sec. 40(a)(v) are similar in all material aspects except for certain structural changes. It is further held that sec. 40(a)(v) equally applies to the provisions of sec. 40A(5)(a)(ii). In this case, the Hon'ble Supreme Court disagreed with the opinion of the Kerala High Court in CIT v. Commonwealth Trust Ltd., 135 ITR 19. In the light of the clear facts and the aforesaid decision of the apex Court, we answer question No.1 in the affirmative, against the Revenue and in favour of the assessee.