COMMISSIONER OF INCOME TAX Vs. J K BANKERS

JUDGEMENT

(1.) THE I.T. Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following question of law for our opinion :

(2.) THE assessee showed the commission receipts for the year 1958-59 after the aforesaid adjustment of Rs. 44,654.16, and for the assessment year 1959-60 as reduced by Rs. 50,136.80. THE Income-tax Officer, however, calculated the commission at the rate of 1% and rejected the claim made by the assessee. THE assessee thereafter took up the matter in appeal. THE assessees claim for reduction of the commission by an amount of R. 44,654.16 for the year 1958-59 was not accepted by the AAC. THE claim of Rs. 50,136.80 was, however, allowed for the assessment year 1959-60, on the basis of the agreement aforesaid. In the appeal for the year 1959-60, the assessee had been permitted to raise an additional ground by the AAC to the effect that the amount of Rs. 44,654.16 should be allowed as business expenditure under S. 10(2)(xv). This contention too was not accepted. THE assessee appealed. THE Tribunal held that so far as the deduction of Rs. 44,654.16 is concerned, that could not be allowed in the assessment year 1958-59, as it had already accrued to the assessee in that year, and the modification of agreement had taken place in the subsequent year. THEy, however, upheld the assessees claim for deduction of this amount under S. 10(2)(xv) for the assessment year 1959-60. THE counsel for the department urged that although the agreement came into existence on September 30, 1958, as it was retrospective in its operation, the amount could be allowed if at all in the assessment year 1958-59, and not for the assessment year 1959-60. It was also urged that the AAC had found that the aforesaid amount had not been incurred on the basis of any business consideration, the Tribunal erred in allowing the assessees appeal without examining this aspect of the matter.

(3.) WE, accordingly, answer the question in the affirmative, in favour of the assessee, and against the department. The assessee is entitled to its costs, which is assessed at Rs. 200. Counsels fee is assessed at the same figure.