COMMISSIONER OF INCOME TAX Vs. HINDUSTAN MOTORS LTD

JUDGEMENT

(1.) At the instance of the Commissioner of Income-tax, Central I, Calcutta, several questions of law have been referred to this court under Section 256(1) of the Income-tax Act, 1961, for the assessment years 1971-72, 1972-73 and 1973-74.

(2.) For the aforesaid three years, the following common question of law has been referred to this court :

(3.) The facts relating to this question are stated hereafter : The assessee-company is a manufacturer and dealer in motor cars, trucks, flanges, steel sheet castings, spare parts and also scrap. For each of the three assessment years, the assessee claimed expenditure on account of payment of pension to Smt. Ginni Devi Churiwal, wife of an employee, Shri K.D. Churiwal who died in 1961, and also to a retired employee, Shri Mahadeo Maharaj. The lady was paid pension of Rs. 15,000, Rs. 10,655 and Rs. 7,500 and the other retired employee received pension of Rs. 600 per year. According to the Income-tax Officer, the payments were not made according to service conditions but it was of a gratuitous nature. Therefore, the amounts were disallowed.