TMI Blog2007 (3) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... of the court was delivered by R. K. AGRAWAL J.— 1. The Income-tax Appellate Tribunal, Allahabad has referred the following question of law 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 legally correct in confirming the order of the Commissioner of Income-tax by holding that the various expenses like salary and wages bonus, rent, railway siding expenses, labour and welfare expenses, interest and law charges cannot be said to have been incurred to keep the status of the company as company alive?" 2. The reference relates to the assessment year 1978-79. 3. Briefly stated, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Rampur Timber and Turnery Co. Ltd. [1981] 129 ITR 58. Accepting the above contention of the assessee, the Commissioner of Income-tax (Appeals) directed that Rs. 10,000 be allowed to the assessee to cover the expenditure to keep the status of the company as alive. The assessee appealed to the Tribunal. The Tribunal dismissed the appeal with the following findings: "On the facts of the present case, it is difficult to say that there was lull in business. For many past years the assessee-company had done no business; it dosed it down and gave its factory on leave and licence basis to J. K. Jute Mills. Since the aforesaid agreement ended till date, the assessee has not carried on any business. In the accounting period itself, there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this stand point. Salaries and wages bonus, etc., have been paid by the assessee to the mill supervisors, clerks, factory workers and head office staff to the extent of Rs. 6,57,099. Rent, etc., have been paid to the extent of Rs. 43,490. Railway siding expenses aggregate to Rs. 8,745 labour and staff welfare expenses aggregate to Rs. 10,233, interest payments aggregate to Rs. 1,58,788. Various payments on account of law charges aggregate to Rs. 38,857. There is hardly any expenditure as above which may be directly relatable to the dividend income earned by the assessee. Expenses indirectly relatable to it, viz., to keep its existence as company have been estimated by the learned Commissioner of Income-tax (Appeals) at P.s. 10,000 and have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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