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High CourtsDivision Bench(1988) 08 MP CK 0007

Commissioner of Income Tax vs Steel Ingots (P.) Ltd.

Madhya Pradesh High Court · Decided on 5 August 1988 · Citation: (1989) 175 ITR 290 : (1988) 40 TAXMAN 258

HON’BLE JUDGES
G.G.Sohani, Acting C.J. · R.K. Verma, J
CASE NUMBER
Miscellaneous Civil Case No. 284 of 1985
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Judgment

7 paragraphs · 334 words

G.G. Sohani, Actg. C.J.

1.

This is an application u/s 256(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act").

2.

The material facts giving rise to this application, briefly, are as follows :

3.

The assessee is a private limited company deriving income from manufacture and sale of steel ingots. During the assessment year 1981-82, the assessee incurred expenditure on the foreign travel of its director and his wife in connection with the medical treatment of director. The entire expenses were disallowed by the Inspecting Assistant Commissioner (Assessment). The appeal preferred before the Commissioner of Income Tax (Appeals) was dismissed. On further appeal before the Tribunal, the Tribunal held that the expenditure on the foreign tour of Mr. and Mrs. Agrawal and the medical expenses incurred on the treatment of Shri Agrawal were admissible as business expenditure. The Tribunal, accordingly, directed the Inspecting Assistant Commissioner (Assessment) to work out the allowable expenses incurred by the assessee in the light of the order passed by the Tribunal. Aggrieved by the order passed by the Tribunal, the Revenue sought a reference but as the application submitted by the Revenue in that behalf was rejected, the Revenue has filed this application.

4.

Having heard learned counsel for the parties, we have come to the conclusion that the following question of law does arise out of the order passed by the Tribunal :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the expenditure incurred on the foreign tour of the director and his wife in connection with the medical treatment of the director, was business expenditure of the assessee and allowable as a deduction under the Income Tax Act, 1961 ?"

5.

The application is, therefore, allowed. The Tribunal is directed to state the case and to refer the aforesaid question of law to this court for its opinion. In the circumstances of the case, parties shall bear their own costs of this application.