1991 (2) TMI 28

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ce of the Revenue, the following question of law for the assessment year 1982-83 has been referred to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to deduction of the entire expenditure of Rs. 12,54,382 under rule 6AA of the Income-tax Rules which was inserted with effect from lst August, 1981, a .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... se of the power given under the above clause, rule 6AA was framed and brought into force through the Income-tax (Eighth Amendment) Rules, 1981, with effect from August 1, 1981. Clause (b) of the above rule 6AA provided as under : "Maintenance outside India of a warehouse for the promotion of the sale outside India of such goods." The Assessing Officer was of the view that as the said rule came .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the income of the assessee was to be computed as per the law in force on April 1, 1982, and as on the above date the rule was in force, the assessee was entitled to weighted deduction on the entire expenditure incurred on payment of warehousing charges. The Tribunal held as follows : "It is well-settled that though the subject of the charge is the income of the previous year, the law to be appli .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ncome-tax (Eighth Amendment) Rules, 1981, with effect from August 1, 1981. Therefore, the rule was operative during the previous year relevant to the assessment year 1982-83. It is now well-settled that the law as on first day of the assessment year will govern the assessment. It cannot be disputed that rule 6AA came into force during the previous year relevant to the assessment year and that it w .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... view, this contention cannot be accepted. Once the rule has come into force, it will govern the case of the assessee and the assessee was entitled to the expenditure incurred by the assessee during the relevant previous year. Therefore, the Tribunal was right in allowing the entire deduction on items covered by rule 6AA of the Rules. We, therefore, answer this question in this reference in the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X