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1 - 10 of 12 (0.27 seconds)G.J. Coelho vs The State Of Madras Represented By The ... on 19 January, 1960
33. The next case cited to us is G.J. Coelho v. State of Madras, [1960] 40 I.T.R. 686 (Mad.). That was a case relating to the agricultural income-tax. The assessee in his assessment to tax on his agricultural income from his plantation for the assessment year 1955-56 under the Madras Agricultural Income-tax Act, 1955, claimed deduction of the entire interest paid by him on monies borrowed for the purpose of purchasing plantation. Rejecting that claim, the Madras High Court held that the interest was not an allowable deduction under Section 5(k) of the Act as it was not an expenditure on the land within the meaning of that section. Their Lordships, however, held that the expenditure by way of payment of interest was not of a capital nature. The decision in that case was exclusively upon the language of the particular enactment, which fell for their Lordships* consideration and cannot be said to render any assistance to us. No observation in the said judgment is also useful for our purpose.
Habib Hussein vs Commissioner Of Income-Tax, Bombay ... on 8 August, 1962
34. Then comes Habib Hussein v. Commissioner of Income-tax, [1963] 48 I.T.R. 859 (Bom.). It is upon this decision that the two tribunals below have mainly relied. In that case, the assessee obtained a licence from the owner of a plot to enter upon the land and erect a cinema theatre, business premises and residential quarters on the land, on payment of a rental of Rs. 4,200 per month. For the purpose of erection of the theatre and starting the business, the assessee entered into an agreement with the owner of the plot, who was an influential businessman, by which the latter agreed to help the assessee in getting prepared suitable plans and designs for the cinema theatre and other buildings, in obtaining permission from the Bombay Municipality for constructing an additional sixth floor, in procuring the required finance to enable the assessee to complete the construction of a modern theatre and other buildings, in procuring various priorities and permits for scarce materials including cement, steel and petrol for transport, in securing import licences for various goods for the purpose of the cinema theatre, in securing foreign exchange facilities to enable the assessee to import from abroad the goods required for the purpose of the theatre and other buildings and to advise the assessee from time to time during the course of construction of the cinema theatre and buildings. In consideration of the aforesaid services and assistance rendered by the owner, the assessee agreed to give the latter for a period of 20 years 2 per cent. of gross annual income earned by him in his cinema business. Subsequently, a new agreement was entered into by which the parties agreed that in full satisfaction of payment of 2 per cent. of the annual gross income for 20 years as provided in the original agreement, the assessee should pay to the owner a sum of Rs. 3,30,000 within a period of five years by twenty quarterly instalments of Rs. 16,500. The amount of Rs. 3,30,000 was debited by the assessee at the close of the account year. The assessee claimed in the subsequent accounting year that the said sum should be included in the actual cost of the depreciable assets to the assessee for the purpose of determining the depreciation allowance allowable to him under Section 10(2)(vi) of the Act.
Commissioner Of Income-Tax (Central) vs Standard Vacuum Refining Co. Of India ... on 18 August, 1965
38. The only decision which takes the view which can be said to be contrary to our view is Commissioner of Income-tax v. Standard Vacuum Refining Co. of India Ltd., [1966] 61 I.T.R 799, 802, 808 (Cal.) We have, therefore, very closely and carefully examined this decision. In that case, the assessee-company borrowed moneys on debentures in June, 1953, interest to run from that date, and utilised the amount along with other moneys financed by it for setting up a refinery which started work on September 1, 1954. All expenses incurred during the period of construction including a sum of Rs. 23,53,284 being the interest which had accrued on the aforesaid debentures from the date of the borrowings to the date of commencement of the business were capitalised and depreciation on the full amount was claimed. The Tribunal had held that the assessee-company was entitled to depreciation on the capitalised interest also. On a reference to the High Court by the department, the Calcutta High Court held :