COMMISSIONER OF INCOME TAX Vs. SERAIKELLA GLASS WORKS PRIVATE LIMITED

JUDGEMENT

(1.) IN this reference under Section 256(1) of the INcome-tax Act, 1961, the questions referred to us for our opinion are two in number. They read as follows:

(2.) THESE two tax cases relate to the assessment year 1970-71. While assessing, the Income-tax Officer rejected the claim of the assessee of Rs. 4,94,303 claimed to have been incurred in the repairs and renovation of the furnace. The assessee claimed it to be a revenue expenditure whereas the Department asserted that it was capital in nature. The next matter which fell for consideration before the Income-tax Officer was whether the commission paid by the assessee-company to the directors was allowable in terms of Section 40(a)(v) of the Act,

(3.) THE question is whether commission paid to the directors could have been allowed or not.