IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX REFERENCE NO. 384 OF 1995 The Commissioner of Income Tax, Bombay .. Applicant V/s. Taj Trade & Transport Co. Ltd., Bombay .. Respondent Mr. R.V. Desai, Sr. Advocate with Ms. S.V. Bharucha for the Applicant Mr. P.C. Tripathi with Mr. Dinesh Vyas for the Respondent CORAM : S. RADHAKRISHNAN & CORAM : S. RADHAKRISHNAN & CORAM : S. RADHAKRISHNAN & J.P. DEVADHAR, JJ. J.P. DEVADHAR, JJ. J.P. DEVADHAR, JJ. DATED : 28.02.2005 DATED : 28.02.2005 DATED : 28.02.2005 P.C.:- P.C.:- P.C.:- 1. Heard the learned counsel for the Applicant and the Respondent. The following two questions are referred:- "i. Whether, on the facts and in the circumstances of the case and in law, the Income-tax Appellate Tribunal is justified in holding that the assessee is entitled to deduction u/s. 80HHC of the Income-tax Act, in respect of the sales across the counter to foreign tourists and that the Commissioner of Income-tax (Appeals) was justified in allowing the same? ii. Whether, on the facts and in the circumstances of the case and in law, the Income-tax Appellate Tribunal is justified in upholding the order of the Commissioner of Income-tax (Appeals) directing the Income-tax Officer to compute the disallowance in respect of expenditure incurred by the assessee on the provision of remuneration and benefits to its employee-directors u/s. 40(c) and not under s. 40A(5) of the Income-tax Act, 1961?" 2. Both the learned counsel states that the first question is squarely covered by judgment of the Supreme Court in CIT v. Silver and Arts Palace 2003 (259) ITR CIT v. Silver and Arts Palace 2003 (259) ITR CIT v. Silver and Arts Palace 2003 (259) ITR 684 (S.C.) 684 (S.C.) 684 (S.C.). In view thereof, the first question is answered in the affirmative, i.e. in favour of the assessee and against the Revenue. As far as the second question is concerned, both the learned counsel concede ( 2 ) that the said question is squarely covered by a judgment of Division Bench of our Court in CIT v. Hico Products CIT v. Hico Products CIT v. Hico Products P. Ltd. (1993) 201 ITR 567 (Bom.) P. Ltd. (1993) 201 ITR 567 (Bom.) P. Ltd. (1993) 201 ITR 567 (Bom.). In view thereof, the second question is answered in the affirmative, i.e. in favour of the assessee and against the Revenue. (S. RADHAKRISHNAN, J.) (S. RADHAKRISHNAN, J.) (S. RADHAKRISHNAN, J.) (J.P. DEVADHAR, J.) (J.P. DEVADHAR, J.) (J.P. DEVADHAR, J.)