1990 (11) TMI 92

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....by B. P. JEEVAN REDDY C. J.-The Income-tax Appellate Tribunal, Allahabad, has stated the following question for the opinion of this court under section 256(2) of the Income-tax Act, 1961 "Whether, on the facts and in the circumstances of the case, the Tribunal was, in law, justified in upholding the Appellate Assistant Commissioner's decision allowing the assessee's claim for bifurcation of ....

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....sold to the farmers not only included the profit of the Corporation but it also included the "administrative charges". Administrative charges were recovered from the purchasers at the rate of 1 3/4per cent. of the cost. In its return, the Corporation distributed the discount amount, profits and administrative charges over the, period of the hire-purchase duration. So far as the profit is concer....

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.... like the profit margin charged by the Corporation. We, therefore, think that the Corporation was justified in distributing the discount (commission) amount over the period of the hire-purchase duration. We may now deal with the question relating to administrative charges. The first enquiry which we must make in this behalf is what does the expression "administrative charges" signify. According....

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....arges are meant to cover all these expenses. If this is the meaning of the expression, the assessee would not be unjustified in distributing and spreading this amount over the period of the hire purchase transaction. We recognise that had the administrative charges meant what the Income-tax Officer said in his order, the situation would have been different. But since we are accepting the connotati....