COMMISSIONER OF INCOME TAX Vs. MADURA COATS LTD

JUDGEMENT

(1.) THE Tribunal has stated a case under S. 256(1) of the IT Act, 1961, and referred the following questions of law in relation to the asst. year 1980 81 of the assessee:

(2.) MR . P.P.S. Janarthana Raja, learned counsel, undertakes to file Vakalath for the respondent assessee.

(3.) IN so far as the second question is concerned, it relates to the disallowance of the expenditure under S. 40A(5) of the Act. It was found by the assessing authority that the expenditure was incurred in respect of use of the company's cars by the employees and directors for their personal purposes. Hence, the disallowance of the expenditure under S. 40A(5) by the assessing authority is warranted as the cars were used for the personal purposes of the employees and directors of the assessee and the Tribunal was not correct in deleting this amount. We, therefore, answer this question in favour of the Revenue and against the assessee.