Commissioner of Income Tax vs Dawn Mills Co. Ltd.

B.P. Saraf, J.—By this application u/s 256(2) of the income tax Act, 1961 (''the Act''), the revenue seeks a direction to the Tribunal to refer the following questions of law for opinion to this Court:

" 1. Whether on the facts and in the circumstances of the case, and in law, the Tribunal was right in directing the Assessing Officer to exclude petrol expenses (Rs. 93,366), repairs (Rs. 3,36,957) and insurance premium on motor car (Rs. 20,062), conveyance charges (Rs. 66,103) while computing the disallowance u/s 37(3A) ?

Whether, on the facts and in the circumstances of the case, and in law, the Tribunal was right in directing the Assessing Officer to exclude petrol expenses and conveyance charges though covered u/s 37(1) from the purview of disallowance u/s 37(3A) ?"

The rule was issued and the matter was taken up for hearing. At the time of hearing of the Rule, the learned counsel for the assessee pointed out to us that the proposed questions are misconceived and do not arise out of the order of the Tribunal. It was stated before us by the learned counsel that in the instant case, the Tribunal has not directed the Assessing Officer to exclude the petrol expenses, etc., on motor car while computing disallowance u/s 37(3A). On the other hand, the Tribunal has made it clear that the assessee is not entitled to claim allowance of such expenditure. Our attention has been drawn to the Commissioner''s order dated 10-5-1989 from which it is clear that this allowance was only in respect of petrol expenses, etc., incurred in respect of motor lorries and vans. He has also drawn our attention to the order of the Tribunal and submitted that the Tribunal has also made it clear that the assessee will be entitled to the expenses referred to in the questions only insofar as they relate to the motor lorries and vans. It was stated by the learned counsel that the Tribunal has nowhere directed the Assessing Officer to allow deductions on account of expenses under the heads mentioned in the questions incurred in respect of motor cars.

Dr. Balasubramanian, the learned counsel for the applicant, could not counter the above submission of the learned counsel for the respondent in view of the order of the Commissioner (Appeals) and the Tribunal. He submitted that if the assessee accepts the position that the Tribunal has not directed the Assessing Officer to allow deduction to the assessee in respect of the expenses under the heads mentioned in the questions in respect of motor cars, in that case the questions will not arise out of the order of the Tribunal. Considering the facts and circumstances of the case and the submissions and statement of the learned counsel for the assessee and the counsel for the revenue, in our opinion, the question sought to be referred does not arise out of the order of the Tribunal. This application is, therefore, rejected. In the circumstances of the case, there shall be no order as to costs.