w w w . L a w y e r S e r v i c e s . i n



Commissioner Of Income-Tax v/s R.N. Oswal Hosiery Factory


Company & Directors' Information:- J G HOSIERY PRIVATE LIMITED [Active] CIN = U18101TZ2001PTC009707

Company & Directors' Information:- K D S HOSIERY PRIVATE LIMITED [Active] CIN = U18101PB2001FTC024327

Company & Directors' Information:- R M H HOSIERY PRIVATE LIMITED [Active] CIN = U17125DL2007PTC167271

Company & Directors' Information:- P R OSWAL HOSIERY PRIVATE LIMITED [Active] CIN = U74899DL2004PTC124189

Company & Directors' Information:- P T M HOSIERY PVT LTD [Active] CIN = U52322WB1994PTC062394

Company & Directors' Information:- M G HOSIERY PRIVATE LIMITED [Active] CIN = U17124TZ2002PTC010195

Company & Directors' Information:- B M OSWAL HOSIERY PRIVATE LIMITED [Active] CIN = U51311PB1985PTC006334

Company & Directors' Information:- D K OSWAL HOSIERY (INDIA) PRIVATE LIMITED [Active] CIN = U18101UP2004PTC028524

Company & Directors' Information:- D D HOSIERY PVT LTD [Active] CIN = U18101WB1973PTC028694

Company & Directors' Information:- M. B. HOSIERY PRIVATE LIMITED [Active] CIN = U18101WB2008PTC125110

Company & Directors' Information:- L C OSWAL HOSIERY PRIVATE LIMITED [Active] CIN = U18101PB1989PTC009968

Company & Directors' Information:- R R HOSIERY PRIVATE LIMITED [Active] CIN = U18101MH1984PTC034394

Company & Directors' Information:- K K HOSIERY PRIVATE LIMITED [Active] CIN = U18204MH2014PTC251777

Company & Directors' Information:- B B HOSIERY PRIVATE LIMITED [Strike Off] CIN = U74999MH2015PTC267158

Company & Directors' Information:- M C S HOSIERY PRIVATE LIMITED [Strike Off] CIN = U51311WB2001PTC093781

Company & Directors' Information:- S P HOSIERY PVT LTD [Strike Off] CIN = U51311PB1985PTC006113

Company & Directors' Information:- M D OSWAL HOSIERY PVT LTD [Strike Off] CIN = U99999DL1980PTC010815

Company & Directors' Information:- D A V HOSIERY FACTORY LTD [Strike Off] CIN = U17115WB1949PLC017775

    Decided On, 24 September 1986

    At, High Court of Punjab and Haryana

    By, THE HONOURABLE MR. JUSTICE S.P. GOYAL & THE HONOURABLE MR. JUSTICE D.V. SEHGAL

    For the Appearing Parties: Ajay Mittal, Ashok Bhan, D.K. Gupta, G.C. Sharma, S.S. Mahajan, Advocates.



Judgment Text

(1.) THE assessee is a registered firm and derives its income from the manufacture of hosiery goods and their sale to U. S. S. R. through its purchase agency, M/s. Rozno Exports. It claimed weighted deduction under Section 35b of the Income-tax Act, 1961 (hereinafter called "the Act"), on payment of commission of Rs. 3,10,749. 99 to M/s. Singh and Co. , New Delhi, and M/s. Handicraft Handloom Export Corporation, which was disallowed by the Income-tax Officer. The Commissioner of Income-tax (Appeals), on appeal, accepted the claim of the assessee and his order having been confirmed by the Tribunal, the Revenue moved an application under Section 256 (1) of the Act for getting the following question referred to this court :

"whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the amount of Rs. 3,10,749. 99 paid as commission to M/s. Singh and Co. New Delhi, and M/s. Handicraft Handloom Export Corporation is entitled to weighted deduction under Section 35b (1) (b) of the Income-tax Act, 1961 ?"

(2.) THE Tribunal declined the prayer relying on the decision of a Special Bench, whereupon the Revenue moved this petition under Section 256 (2) of the Act.

(3.) IN similar circumstances, in Income-tax Case No. 20 of 1986, decided on May 12, 1986 [cit v. Bhagat Brothers [1987] 165 ITR 660 (P and H) (supra) ], we had issued a mandamus to the Tribunal for referring such a question. Now, after hearing Mr. G. C, Sharma, learned counsel for the assessee, we find that the implication of the opinion expressed by the Central Board of Direct Taxes in paragraph 7 of the Instruction No. 1487 dated October 19, 1982, was not correctly projected before us. When closely read, it would be revealed that the Board never opined that the exemption would not be available for the assessment years 1978-79 and 1979-80. Instead, what is stated is that so far as these two years were concerned, no weighted deduction would be available in respect of expenditure incurred on or after April 1, 1978, unless the following conditions were fulfilled :

" (a) The eligible assessee was engaged in (i) the business of export of goods and was either a small scale exporter (exporting goods manufactured in his own 'small scale industrial undertaking ') or a holder of an Export House Certificate issued by the Chief Controller of Imports and Exports ; or (ii) the business of ' provision of technical know-how' or the rendering of services in connection with the provision of technical know-how, to persons outside India ; and (b) The expenditure in relation to which weighted deduction has been claimed is incurred by the assessee wholly and exclusively for the purposes of the business referred to in (a) above. "

(4.) THESE additional conditions contained in Clauses (a) and (b) of paragraph 7 were introduced by the Finance Act, 1978, with effect from April 1, 1978, and later on omitted with effect from April 1, 1980. In the present case, the assessee is admittedly a holder of an Export House Certificate issued by the Chief Controller of Imports and Exports and, therefore, qualifies for the exemption under Clause (a

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) referred to above, according to the said instructions of the Central Board of Direct Taxes. As it is not disputed that the instructions issued by the Central Board of Direct Taxes are binding on the Revenue, it would not be open to it to seek a reference of the question noticed above. This petition is, therefore, dismissed but without any order as to costs.
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