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1 - 10 of 14 (1.29 seconds)Article 2 in Constitution of India [Constitution]
Article 3 in Constitution of India [Constitution]
British Sugar Manufacturers, Ltd. vs Harris (Inspector Of Taxes). on 16 December, 1937
Before the Tribunal it was not in dispute that the expenditure related to Ciba Pharma's business. The expenditure thus would be an expenditure wholly and exclusively laid out or expended for the purpose of the business. In our judgment, therefore, the expenditure would be an allowable deduction under section 10(2)(xv) of the Act. The view taken by us finds support in a decision of the King's Bench Division in British Sugar Manufacturers Ltd., v. Harris. Facts in that case were that the assessee-company, which was the appellant, had agreed to pay to two other companies a certain percentage of its net annual profits "in consideration of their giving to the company (assessee-company) the full benefit of their technical and financial knowledge and experience." The question to be considered was whether the payment made under this agreement by the assessee-company to the other companies was an allowable deduction. The contention of the assessee-company was that payment under the agreement was a payment for the services rendered; that it was a sum expended in earning its profits and not expended for capital purposes; that it was not a distribution of its profits and, therefore, the expenditure should be allowed as a deduction in computing the assessee-company's profits. The contentions of the assessee-company were upheld by the Appeal Court and it held that the payments made under the aforesaid agreement were admissible deductions in computing the appellant-company's profits.