N.J. Albert vs Commissioner Of Income Tax

1. The High Court answered the questions quoted below in the negative and in favour of the Revenue in the light of its earlier decision in I.T.R. Nos. 7 and 8 of 1982, Commissioner of Income-tax, Trivandrum v. C. Tharian and Sons, Cashew Exporters, Valakom, Kottarakkara 166 ITR 607 : 1987 Tax LR 966. 1. Whether on the facts and in the circumstances of the case, the assessee is en titled to weighted deduction under Clauses (i) and (ii) of Section 35B(1)(b) of the Income-tax Act, 1961? 2. Whether on the facts and in the circumstances of the case the Tribunal is justified in holding that services rendered by the Agent, Nut Meat Trading Company, is not in connection with the distribution of the goods and is not the above finding wrong and unreasonable and based on conjectures and surmises? 3. Whether on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding that there are services rendered by the selling agent which come under Sub-clauses (i) and (ii) of Section 35B(l)(b). It is these services which are terminated only by the agents commission and are not the above findings wrong, un reasonable, perverse, based on surmises and baseless assertions? 4. Whether on the facts and in the circumstances of the case the assessee is entitled to claim deduction in respect of the pro vision made for payment of leave with wages? 2. In Commissioner of Income-tax v. Kerala Nut Food Company , a Division Bench of the same High Court took note of a Circular of the Central Board of Direct Taxes and certain decisions and concluded, in our view, rightly, that the decision in M/s. C. Tharian and Sons's case was per incuriam. The answer by the High Court in the instant case of the question posed to it relying exclusively upon M/s. C. Tharian & Sons's case 1987 Tax LR 966 must, therefore, be held to be bad in law. 3. We think, in the circumstances, that the Reference (R.A. No. 257/Coch/81) should be restored to the file of the High Court to be heard and disposed of afresh. This shall be done expeditiously, having regard to the passage of time. 4. Order on the appeal accordingly. No order as to costs.