Usha Sales Ltd. vs Commissioner of Income Tax

Arijit Pasayat, C.J.—At the instance of the assessed, the following questions have been referred for the opinion of this court u/s 256(1) of the Income Tax Act, 1961 (in short "the Act"), by the Income Tax Appellate Tribunal, Delhi Bench "C" (hereinafter referred to as "the Tribunal"):

"1. Whether, on the facts and in the circumstances of the case, the liability of Rs. 2,92,319 incurred by way of interest under various sections of the Income Tax Act was an allowable deduction in computing the profits and gains of the assessed for the accounting period relevant to the assessment year 1974-75 ?

Whether, on the facts and in the circumstances of the case, the liability to pay surtax is an allowable deduction in computing the total income of the assessed for the accounting period relevant to the assessment year 1974-75 ?"

The factual position need not be gone into in detail as issues involved in the questions have been directly dealt with by the apex court. So far as the first question is concerned, the decision of the apex court in Bharat Commerce and Industries Ltd. Vs. The Commissioner of Income Tax, Central II, , will govern the question. The answer to the question, Therefore, is in the negative, in favor of the Revenue and against the assessed. So far as the second question is concerned, also the decision of the apex court in Smith Kline and French (India) Ltd. and Others Vs. Commissioner of Income Tax, , will govern the question. The answer to the question is in the negative, in favor of the Revenue and against the assessed.

The reference stands disposed of.