INCOME TAX

Effect of the decision of the Supreme Court in ^Distributors (Baroda) Pvt. Ltd. ^v.^ Union of India^ [1985] 155 ITR 120

Circular No. 691

Dated 5/9/1994

Circular No. 341, dated 10-5-1982 (see [1982] 137 ITR (St.) 4) had been issued in the wake of the Supreme Court's judgment in the case of Cloth Traders (P.) Ltd. [1979] 118 ITR 243 (SC). This decision was subsequently overruled by the Supreme Court in the case of Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120 (SC) which, therefore, gives the correct legal position. It is, therefore, clarified that Circular No. 341 ceases to have applicability for any assessment year consequent to the decision of the Supreme Court in the case of Distributors (Baroda) P. Ltd. [1985] 155 ITR 120.

(Sd.) Sadhna Pavadia,

Under Secretary to the Government of India.