COMMISSIONER OF INCOME-TAX VS KALINGA TUBES, 1992 PTD-ORISSA-HIGH-COURT-INDIA 1037 (1990)

Income-tax---

----Reference---Business expenditure---Payment of guarantee commission to trust---Trust held to be genuine by High Court---Tribunal justified in allowing deduction of guarantee commission---No question of law arises.

Held, dismissing the application for reference, that the Kalinga Foundation Trust had been held to be genuine by the High Court in CIT v. Biju Patnaik (1974) ILR (Cuttak) 374 and hence the Tribunal was justified in allowing the deduction of Rs.45,000 paid as guarantee commission to the Kalinga Foundation Trust. No question of law arose from the order of the Tribunal.

CIT v. Biju Patnaik (1974) ILR (Cuttack) 374 ref.

Standing Counsel for the Petitioner.

JUDGMENT

R.C. PATNAIK, J.---This is an application under section 256 of the Income Tax Act, 1961, to call upon the Appellate Tribunal to state a case on the following question of law and refer the same to this Court:

"Whether, on the facts and in the circumstances of the case, -the Tribunal was justified in allowing the claim in payment of guarantee commission in the sum of Rs.45,000 to Kalinga Foundation Trust, which is not considered to be a genuine trust?"

The aforesaid amount was shown in the books of account of the assessee-opposite party as receipt from (sic) Kalinga Foundation Trust. The same was disallowed by the Income-tax Officer on the ground that the trust had no independent and separate identity of its own and treated the amount as an income of the assessee from undisclosed sources. The appeal carried by the assessee was allowed and in further appeal by the Revenue, the Tribunal, following the decision in CIT v. Biju Patnaik (1974) ILR (Cuttack) 374, that Kalinga Foundation Trust was an independent and separate entity, negatived A the plea of the Revenue. An application filed by the Revenue for making a reference was rejected. Hence, this application to call for a statement of case and reference of the question.

Having regard to the fact that, in the past Kalinga Foundation Trust has been held to be an independent and separate entity and advances by it have been held to be real and genuine and such a holding having been upheld by this Court, as stated by the Tribunal, which is not disputed by the Revenue before us, we see no merit in this application and decline our jurisdiction.

In the result, the application is dismissed.

S.C. MOHAPATRA, J.---I agree.

M.BA./1566/`T Application dismissed.