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Judgment
By the Court - This is a reference under s. 256(1) the It Act, 1961 to answer the following questions law, namely :
Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the disallowances of guarantee commission in excess of 1% of guarantee to the finance raised by the Co. (paid by the company to the five guarantors) cannot be sustained under s. 40A(2) of the IT Act, 1961 ?
Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the guarantee commission has to be considered only in the light of the provisions of s. 40(c) of the Act ?
The relevant assessment years are 1971-72, 1972-73 and 1973-74. In respect of the same assessee and on the same facts for two earlier assessment years, namely, 1969-70, and 1970-71, the same questions were referred for the decision of this Court in IT Reference No. 12/1979 (CIT v. Ayurvedic Sevashram P. Ltd. (1986) 54 CTR 119(Raj) ). This Court, by its order dt. 24-7-1985 passed therein, answered and first question in favour of the assessee and held that it was not necessary to decide the second question in view of the answer to the first question.
There us no controversy before us that the present referred questions have to be answered similarly following the aforesaid earlier decision of this Court.
Consequently, we answer the aforesaid first question in favour of the assessee and hold that decision of second question is not necessary. No order as to costs.