C.I.T. KANPUR versus M/S BISHAMBHAR NATH

High Court of Judicature at Allahabad

Indian Supreme Court Cases / Judgements / Legislation

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C.I.T. Kanpur v. M/S Bishambhar Nath - INCOME TAX REFERENCE No. 126 of 1985 [2004] RD-AH 841 (21 September 2004)

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HIGH COURT OF JUDICATURE OF ALLAHABAD

Court No. 37

INCOME TAX REFERENCE NO. 126 OF 1985

.........

Commissioner of Income Tax, Kanpur.

Vs.

M/s Bishambhar Nath Swarup Narian, Kanpur.

Hon'ble R.K. Agarwal, J.

Hon'ble K.N. Ojha, J.

The Income Tax Appellate Tribunal, Allahabad has referred the following question under Section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) for opinion to this Court:

"Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in deleting the addition to the assessee's income of Rs. 13,044/- as interest paid by M/s Bishambhar Nath Swaroop Narain to the membersof the families of Sarvshri Shyam Narain Mehrotra and Swaroop Narain Mehrotra?"

Briefly stated the facts giving rise to the present reference are as under:

The present reference relates to the Assessment Year 1979-80. The respondent, which is a registered Firm paid interest amounting to Rs. 13,044/- to various members of the family of Sarvshri Shyam Narain Swaroop Narain, partners in the assessee firm in their HUF capacities. This amount was added back in the assessment under section 40(b() of the Act. The Appellate Assistant Commissioner, however, deleted the addition. The revenue appeal before the Tribunal has failed.

We have heard Sri A. N. Mahajan, learned Standing Counsel for the revenue. Nobody appeared for the respondent-assessee.

It may be mentioned here that for the Assessment Year 1977-78 the Income Tax Appellate Tribunal had referred the following question of law under Section 256(1) of the Act for opinion to this Court:

1. "Whether on the facyts and in the circumstances of the case, the Income Tax Appellate Tribunal was legally correct in deleting the addition of interest of Rs. 21754/- paid by the assessee firm to the members of the families of Shyam Narain Mehrotra and Swaroop Narain Mehrotra?"

2. "Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was legally correct in holding that there was a valid partial partition of Rs. 60,000/- in the assessee HUF, which consisted of only one coparcener?"

The reference was registered as I.T.R. No. 125 of 1982 and this Court vide judgment and order dated 31.3.1999 had answered both the questions in favour of the assessee and against the department. The question no. 1 of I.T.R. No. 125 of 1982 is similar to the present question referred to us except that amount of interest paid is different.

Respectfully following the aforesaid decision we answer the question referred to us in the affirmative i.e. in favour of the assessee and against the revenue. However, there shall be no order as to costs.

Dt/- 21.9.2004

Pcl.

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