UNION COAL CO LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference under s. 66(1) of the Indian IT Act, 1922, has been made in circumstances hereinafter related.

(2.) THE assessee is obliged, under a resolution of its board of directors to pay a pension of Rs. 12,000 per annum, to one Mr. Hunter, a retired manager of the assessee. The amount used to be claimed by the assessee in previous assessment years and used always to be allowed by the ITO in those years as a permissible business expenditure.

(3.) THE assessee preferred an appeal before the AAC and there claimed deduction of the said sum of Rs. 12,000 from the computation of the total income. The AAC allowed the claim with the observation: