1998 (2) TMI 40

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.... J.---This is a combined reference at the instance of the assessee as well as at the instance of the Department. The following questions of law have been referred for our consideration : "1. Whether, on the facts and circumstances of the case, the surtax paid by the assessee under the Companies (Profits) Surtax Act is an admissible deduction in computing the total income under the Income-tax Ac....

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.... the Indian National Congress should be allowed as a deduction in computing the income for the assessment year 1979-80 ?" The year of assessment is common for both the references, viz., 1979-80. In so far as the question of law referred to us at the instance of the assessee is concerned, it is fairly stated that the question is covered against the assessee by a recent decision of the Supreme Co....

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....as introduced by the Taxation Laws (Amendment) Act, 1978, with effect from April 1, 1979, did not apply to the expenditure though incurred in the previous year relevant for the assessment year 1979-80 and subject to any disallowance since the expenditure was incurred prior to April 1, 1979. The reasoning of the Appellate Tribunal is that the law was introduced only with effect from April 1, 1979, ....

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....te and Industries Ltd. v. CIT [1979] 120 ITR 921. There is no doubt that the expenditure was incurred during the previous year relevant for the assessment year 1979-80 and though it was incurred prior to April 1, 1979, the law to be applied is the law in force on the first day of April of the assessment year and since section 37(2B) of the Act came into full force on April 1, 1979, section 37(2B) ....