COMMISSIONER OF INCOME TAX Vs. SOUTHERN PUBLICATIONS LIMITED

JUDGEMENT

(1.) PURSUANT to an order of this Court under S. 256(2) of the IT Act, 1961, the Tribunal has referred the following questions :

(2.) THE brief facts leading to the reference may now be noted. One V.D. Narayanan was one of the directors of the respondent -company during the relevant period. He was discharging the day -to -day work regarding the publication of the newspapers. On 16th June, 1972, there was some commotion and riot in the business premises of the assessee - company during the course of which the car in which the said V.D. Narayanan came to the office was set on fire and was damaged by the miscreants. As a result of that, an expenditure of Rs. 15,904 was incurred towards repairs. That was borne by the company and subsequently ratified in the board's resolution. When the assessee wanted that expenditure to be allowed as business expenditure, the ITO disallowed the claim on the ground that it was incurred for non -business considerations, viz., to relieve the director from his personal responsibility. Aggrieved by that disallowance, the respondent -company preferred an appeal to the AAC, who took a different view and held that the said expenditure was for business purposes and, therefore, allowable as claimed by the assessee. The Revenue preferred a further appeal to the Tribunal. The Tribunal confirmed the view taken by the AAC. Hence, the present revision.

(3.) IN view of the above ruling of the Supreme Court, we do not think that the Revenue has any case warranting interference with the conclusion reached by the Tribunal. Accordingly, we answer the questions against the Revenue and in favour of the assessee, with costs. Counsel's fee Rs. 500.