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1 - 10 of 10 (0.22 seconds)Shree Meenakshi Mills Ltd., Madurai vs Commissioner Of Income-Tax, Madras on 19 September, 1966
(23) The other case which again deals with litigation expenses is a decision of the Supreme Court in Sree Meenakshi Mills Ltd. v. Commissioner of Income-tax, Madras (63 Itr 207)(13). Certain yarn belonging to the appellant company was attempted to be seized by the Textile Commissioner under the Cotton Cloth and Yarn (Control) Order. 1945. The company filed a petition in the Madras High Court: under Section 45 of the Specific Relief Act for an order directing the Provincial Textile Commissioner to desist from seizing the yarn. The petition was dismissed and the company's appeal there from was also dismissed by the Privy Council. The Privy Council also held that the petition was incompetent as the acts in respect of which relief was asked for took place outside the limits of the ordinary civil jurisdiction of the High Court. In prosecuting those proceedings the company spent Rs. 20,035.00 and it had also to pay Rs. 9,512.00 as costs of the Government on its un-successful appeal to the Privy Council. In computing its income, the company claimed deduction of these amounts as expenditure wholly and exclusively laid out for the purpose of its business. It was held by the Supreme Court that expenditure incurred to resist in a civil proceeding the enforcement of a measure, legislative or executive, which imposes restrictions on the carrying on of a business, or to obtain a declaration that the measure is invalid, would, if other conditions are satisfied, be admissible as a deduction under Section 10(2) (xv). In order that an expenditure ma(y be admissible as a deduction under Section 10(2) (xv) it is not necessary that the primary motive in incurring it must be directly to earn income thereby.
Indian Steel & Wire Products Ltd. vs Commissioner Of Income-Tax on 3 July, 1967
(26) Indian Steel & Wire Products Ltd. v. Commissioner of Income- lax, W. Bengal (69 Itr 379) (^) the assessed claimed, inter-alia the deduction in respect of Rs. 150,000 paid to the Indian National Congress. The Income-tax Officer allowed the deduction, but the Appellate Assistant Commissioner and the Tribunal dis-allowed the c same. On a reference, the view of the Tribunal was up-held, \t was said that assuming that there was some connection between this kind of expenditure and the earning of profits, the connection was too remote.
Travancore Titanium Products Ltd vs Commissioner Of Income-Tax, Kerala on 17 January, 1966
One of the cases mentioned by Banerjee J. who wrote the judgment of the court is Travancore Titanium Products Ltd. v. Commissioner of Income-tax (60 Itr 277)(^) where the Supreme Court observed:- "....the nature of the expenditure or outgoing must be adjudged in the light of accepted commercial practice and trading principles. The expenditure must be incidental to the business and must be necessitated or justified by com- mercial expediency. It must be directly and intimately con- nected with the business and be laid out by the taxpayer p in his character as a trader."
Sree Meenakshi Mills Ltd. vs Commissioner Of Income-Tax, Madras. on 19 September, 1962
To' the same effect are the observations of the Supreme Court in another case Sree Meenakshi Mills Ltd.. v. Commission of Income-tax (62 Itr 207 So (13) where the Supreme Court went a step for- ward and observed:- "EXPENDITUREincurred not with a view to the direct and p immediate benefit for purposes of commercial expediency and in order indirectly to facilitate the carrying on of the business, is therefore, expenditure laid out wholly and ex- clusively ^i" the purposes of the trade."
Section 3 in Income Tax Rules, 1962 [Entire Act]
Section 66 in Income Tax Rules, 1962 [Entire Act]
All India Reporter Ltd. vs Commissioner Of Income-Tax, Bombay ... on 25 September, 1962
(7) At the very out-set it may be stated that the Tribunal's approach to the problem does not appear to us to be correct. While relying on a decision of the House of Lords in Morgan (Inspector of Taxes) v. Tate & Lvle Ltd. (26 Itr 195 )(1) and a decision of the Bombay High Court in All India Reporter Ltd. v. Commissioner of Incometax, Bombay City Ii (49 Itr 196) (2) and some other cases which have not been cited in the judgment, the Tribunal has observed that the cases cited on behalf of the assessed relate to expenditure incurred for the purpose of saving the business from extinction. In the present case however, it is not as if the assessed would have had to wind up its business in Vanaspati for which propaganda had to be made by some body. On the other hand, the carrying on of Vanaspati business was not hampered at all by any order of the Government. It is in this view of the matter that the Tribunal reached the conclusion that the expenditure in question was not one incurred by the assessed for carying on its business.
The Specific Relief Act, 1963
J K Cotton Spg. & Wvg. Mills Co. Ltd. (No. ... vs Commissioner Of Income-Tax, U. P. on 29 April, 1966
In J. K. Cotton Spg. and Wvg. Mills Co. Ltd. v. Commissioner of Income-tax, U.P. (62 Itr 813)(") the assessed company paid a A s^¯ of R'' 56,000.00 to the Congress Parliamentary Board for its expenditure in the General Elections and calimed it as a business expenditure on the ground that with the changing pattern of the eco- nomic structure of society it was in the interest of the company to keep the ruling party in power. It was held that as there was no direct nexus between the business of the company and the contribu- tion, the amount of Rs. 56,000.00 paid to the Congress Parliamentary B Board was not allowable as business expenditure.
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