COMMISSIONER OF INCOME-TAX VS KHEMCHAND MOTILAL JAIN
1999 P T D 3153
[236 I T R 45]
[Supreme Court of India]
Present: S. P. Bharucha and V. N. Khare, JJ
COMMISSIONER OF INCOME-TAX
Versus
KHEMCHAND MOTILAL JAIN
Civil Appeal No. 2693 arising out of S.L.P. (C.) No.94 of 1998, decided on 12/05/1998.
Income-tax---
----Reference---Business expenditure---Capital or revenue expenditure-- Amount paid for trade mark and goodwill whether revenue expenditure Question of law---Indian Income Tax Act, 1961, Ss.37 & 256, Held, that the question whether, on the facts and in the circumstances of the cases, the Tribunal was right m holding that the sums of Rs.22,91,728 and Rs.22,66,746 paid by the company to the co-owners of the trade mark and partners of the erstwhile firm in lieu of trade mark and goodwill which was being used by the company for its business was revenue expenditure was a question of law which had to be referred to the High Court.
JUDGMENT
Leave granted.
The High Court declined to ask the Income-tax Appellate Tribunal to refer to it for adjudication the following question:
"Whether, on the facts and in the circumstances of the cases, the Tribunal was right in holding that the sums of Rs.22,91,728 and Rs.22,66,746 paid by the company to the co-owners of the trade mark and partners of the erstwhile firm 'in lieu of trade mark and goodwill which is being used by the company for its business was a revenue expenditure?"
It did so because it found that the consistent view of the High Court had been followed by the Tribunal.
We think that a question of law does arise and that the High Court should have called for a reference. We make it clear that we express no opinion on the answer to be given.
The appeal is allowed. The order under challenge is set aside. The Tribunal shall refer to the High Court the question aforestated for its decision.
No order as to costs.
M.B.A./3299/FC Appeal allowed.