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High CourtsDivision Bench(1997) 04 MAD CK 0142

Commissioner of Income Tax vs A. Rafeeq Ahmed and Co.

Madras High Court · Decided on 9 April 1997 · Citation: (1999) 236 ITR 929

HON’BLE JUDGES
N.V. Balasubramanian, J · Abdul Hadi, J
CASE NUMBER
Tax Case No. 613 of 1986 (Reference No. 448 of 1986)

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Judgment

6 paragraphs · 388 words

N.V. Balasubramanian, J.—At the instance of the Revenue, the Appellate Tribunal has stated a case and referred the following question of law u/s 256(1) of the Income Tax Act, 1961, for the assessment year 1978-79 for our opinion :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the assessee was entitled to weighted deduction u/s 35B of the Income Tax Act in respect of interest on packing credit and commission paid to the State Trading Corporation of India ?"

2.

The question consists of two parts with reference to the claim of the assessee of vital deduction u/s 35B of the Income Tax Act,1961. One relates to the claim with reference to the interest on packing credit and the other with reference to the commission paid to the State Trading Corporation of India. In so far as the claim of the assessee relating to the Commission paid to the State Trading Corporation of India is concerned, Mr. C. V. Rajan, learned counsel for the Revenue, submitted that he is not pressing for an answer to that part of the question.

3.

In so far as the claim of the assessee relating to the interest on packing credit is concerned, this court in the case of Lucas TVS Ltd. Vs. Commissioner of Income Tax, , has held that the assessee is not entitled to claim weighted deduction u/s 35B of the Act in respect of the interest paid on packing credit. Mr. R. Gangadharen, learned counsel appearing for the assessee, has not disputed the above position of law. Following the above decision of this court, we hold that the Tribunal was not correct in holding that the assessee will be entitled to weighted deduction in respect of the interest paid on the packing credit. Accordingly, we answer the question of law referred to us as under :

The Tribunal was correct in law in holding that the assessee will be entitled to claim weighted deduction u/s 35B of the Act in respect of the commission paid to the State Trading Corporation of India, but will not be entitled to claim weighted deduction in respect of the interest on packing credit.

4.

The question of law is answered accordingly. There will be no order as to costs.