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Lakshmiratan Cotton Mills Co. Ltd. vs Commissioner Of Income-Tax, U. P. on 27 March, 1965 cites

Assam Bengal Cement Co. Ltd vs The Commissioner Of Income-Tax,West ... on 11 November, 1954

The payment of a periodical protection feed to the Government in consideration of the Governments undertaking not to grant leases to other persons in the area was held by the Supreme Court to be a capital expenditure in the case of Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax. It was immaterial that the payment was recurring; what was material was its nature.
Supreme Court of India Cites 7 - Cited by 406 - N H Bhagwati - Full Document

The Commissioner Of Income-Tax,Bombay vs Chandulal Keshavlal & Co., Petlad on 17 February, 1960

In Commissioner of Income-tax v. Chandulal Keshavlal & Co. an assessees remitting a part of its commission from the managed company, the financial position of which was not satisfactory, was held to be an allowable deduction. The test applied by the Supreme Court was of commercial expediency. Fines or penalties paid for infringement of law are held to be not deductible because infringement of law cannot be said to be in the interest of the business. Every business is expected to be carried on the accordance with law and, consequently, even if an infringement of law is likely to bring in more profit, fringing it is not for the purpose of the business. In the case of Strong & Co. of Romsey Ltd., an assessee had to pay damages to a customer incurred by the fall of a chimney in his premises and the expenditure was held to be not deductible. Though it was connected with the business of the assessee, Lord Loreburn L. C. said that it did not follow that it was to be deducted. He pointed out that only such losses are to be deducted as are connected with the business in the sense that they are really incidental to the business itself; they cannot be deducted if they are mainly incidental to some other business or fall on the businessman in some chairs other than that a businessman.
Supreme Court of India Cites 7 - Cited by 273 - P B Gajendragadkar - Full Document

Commissioner Of Income-Tax,West ... vs Calcutta Agency Ltd on 21 December, 1950

The company could discharge the onus that lay upon it only by the placing sufficient facts before the Tribunal and not merely by advacing arguments and making submissions : see Commissioner of Income-tax v. Calcutta Agency Ltd. If the payment was not proved to be a revenue expenditure, it was irrelevant to consider what was its true nature, because whatever else might have been its true nature, it was not an allowable deduction. The deduction was claimed only under section 10(2)(xv) and could be allowed only if the payment was a revenue expenditure. The Tribunal was, therefore, concerned only with the question whether the payment was proved to be of that nature or not. If it was not, what its other nature was, was wholly irrelevant; the Tribunal did not go into that matter and question No. 3 could not be said to arise out of its order. The assessee in order to discharge the onus placed before the Tribunal the managing agency agreement, the correspondence between it and the managing agents and the partners of the managing agents, it articles of associations etc.; the Tribunal held that all this material did not prove that the payment was of the nature referred to in section 10(2)(xv) and gave reasons in support of its finding. For its disbelieving a statement of fact or rejecting a contention of law it did not disbelieving a possession of any material; what is needed was only reasons or arguments which would appeal to a reasonable person. It could not disbelieve a statement of fact arbitrarily or without any intelligible reasons; but it could disbelieve it even though it had not in its possession any facts proving it to be false. The law regarding onus of proof is that the party on whom the onus of proving that a fact exists lies must produce sufficient evidence and only then the other party has the onus of rebuttal, i.e., that of evidence to prove the fact does not exist. If the former party does not produce sufficient evidence to prove that the fact does not exist. There is a distinction between a finding that a fact is not proved to exist and a finding that it does not exist; the former finding is given when the party does not discharge the onus by producing evidence sufficient to make out a prima facie case; the other finding is given when, after the he has made out a prima facie case, the other party rebuts it by producing other evidence. There is a similar distinction between disbelieving a statement and holding it to be false; for the latter, there must be some evidence to show that it is false but no evidence is required for disbelieving it. Disbelieving a statement involves only a process of reasoning; it is a matter of judgment or discretion. Of course, the reasoning must be based on facts. Consequently, parts of question No. 1 were not appropriate, particularly sub-questions (d) and (e). It was the companys contention that the disputes between the partners of Beharilal Kailashpat affected the carrying on of the normal business of the company and that consequently the company gained by terminating the managing agency agreement; the Tribunal could disbelieve these statements of fact even though it had no facts in its possession to show that they were false. Lastly, this court could not call upon the Tribunal to frame any question which was not included in the application under section 66(2); it could not raise a question on its own. The questions that have now been framed by the Tribunal are essentially different from the two questions mentioned in the applications under section 66(2). Question No. 1 proposed by the assessee is narrower than question No. 4 now framed by the Tribunal. Further, that question cannot be said to arise out of the Tribunals order because the Tribunal never found that the payment was made for the purpose of getting rid of the managing agents. What the Tribunal found was that the payment was not made for that purpose at all and gave the reasons that no service was rendered at all by the managing agents that disputes between the partners of the managing agents did not act the business of the assessee and that that assessee did not gain at all by terminating the managing agency agreement. The Tribunal gave various reasons for rejecting the assessees claim for deduction under section 10(2)(xv) but the assessee challenged, through question No. 2 proposed by it, only as particular reason on the ground that there was no sufficient evidence to justify it. The assessee in its application under section 66(2) did not challenge the other reasons on the ground that they were not supported by facts. Consequently, this court, as was contended at the bar, went beyond its jurisdiction when it directed the Tribunal to frame question No. 1(b), (c), (d) and (e). The result is that on the assessees application under section 66(2), the only question that this court could call upon the Tribunal to refer to it was question No. 1 (a) of the second statement of case. If the onus lay upon the assessee to prove that the managing agents rendered services to it, the Tribunals disbelieving its evidence on this point does not raise any question of law referable to this court because, as I explained earlier, no facts are required for disbelieving the statement of fact.
Supreme Court of India Cites 7 - Cited by 223 - H J Kania - Full Document
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