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2006 (9) TMI 147 - HC - Income TaxDisallowance of Interest on advance for purchase of tea estate - agricultural in nature ? - Commission paid to agents - rendered services - HELD THAT:- From the material on record it is seen that agreements that were provided were of the year 1990 and at the relevant point of time, there was a direct sale available in terms of the laws governing at that point of time. It was only thereafter, the Government corporations had the monopoly on purchase of liquor at the manufacturing units. In so far as commission paid to agents is concerned, they were paid commission for the services rendered in the matter of sale of liquor to the Canteen Stores Department of the Indian military. We are firmly of the view that the allowance by the Tribunal in the case on hand requires our interference by way of answering the said question against the assessee and in favour of the Revenue. Devolution of corporate guarantee: - The Supreme Court in CIT v. Amalgamations P. Ltd. [1997 (4) TMI 8 - SUPREME COURT] has chosen to consider this issue and the said judgment supports the assessee. In fact this court in the case of this very assessee has chosen to hold in favour of the assessee in ITRC, CIT v. McDowell and Co. Ltd.[2006 (6) TMI 83 - KARNATAKA HIGH COURT] in somewhat identical circumstances. The said judgment to a certain extent holds good on this issue also. Thus, we deem it proper to answer this question in favour of the assessee and against the Revenue. Non-competition fee: - The Tribunal after noticing the rival contentions came to the conclusion that the expenditure incurred is revenue in nature. If the Department is satisfied that Rs. 20 lakhs spent by the company amounts to expenditure, then how can they question the remaining Rs. 80 lakhs in terms of the proceedings. The law is the same whether it is Rs. 20 lakhs or RS 80 lakhs. In these circumstances, and in the light of the acceptance of RS 20 lakhs as expenditure, we deem it proper to answer this question of law in favour of the assessee. Aircraft maintenance - We have seen the findings of the Tribunal. The Assessing Officer and the Commissioner have chosen not to consider the entire expenses. The Tribunal without discussing the material already available on record has chosen to allow the entire claim by holding that the list of passengers in various trips is unnecessary. The Tribunal in our view has not chosen to bestow its attention to the material facts in granting relief to the assessee. In these circumstances, we are of the view that a further fact finding is necessary for answering this question of law. Thus, we deem it proper to set aside the finding on this issue and remit the matter for redecision to the Tribunal and in the light of the material already available on record. The Revenue has also raised the question with regard to disposal of the appeal for the assessment year 1994-95, during the pendency of identical issues for the earlier years before the Tribunal. We are not inclined to answer this question of law in the light of the subsequent passing of orders for earlier years and in the light of those proceedings also pending before us. In the result, the following order is passed. Questions A(I), (II), C and E are answered in favour of the assessee. Question B(I) is answered in favour of the Revenue.
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