Search Results Page
Search Results
1 - 7 of 7 (0.33 seconds)
Vizagapatnam Sugars And Refinery Ltd. vs Commissioner Of Income-Tax, Andhra ... on 30 August, 1961
cites
Section 10 in The Income Tax Act, 1961 [Entire Act]
Eastern Investments Ltd vs Commissioner Of Income-Tax,West ... on 4 May, 1951
The question that arose for decision in Eastern Investments Ltd. v. Commissioner of Income-tax was one under section 12, clause (2), of the Income-tax Act. The assessee, in that case, was an investment company formed originally for acquiring, holding and otherwise dealing with the shares and Government securities held by one A. On his death, B was appointed the administrator of As estate in India and in that capacity B held 50,000 shares belonging to A. Subsequently, as the executors of A required money, B entered into an agreement with the company whereby company agreed to reduce its capital by 50 lakhs and for that purpose took over the shares from B issuing to B debentures of the face value of Rs. 50 lakhs carrying interest at the rate of 5 per cent. per annum redeemable at the option of the registered holder at any time. The question was whether the 5 per cent. interest paid to B on these debentures by the company could be deducted from its income under section 12(2) of the Income-tax Act. It was pointed out by the Supreme Court that :
Assam Bengal Cement Co. Ltd vs The Commissioner Of Income-Tax,West ... on 11 November, 1954
In the present case, the resolution dated April 15, 1941, of the board of directors of the assessee company shows that the debenture loan of Rs. 2 1/2 lakhs was raised for the purpose of repaying the loan to the Central Bank and the share capital of the society as per agreements dated June 29, 1938. If this loan was not raised, the company would have been forced to repay the loan to the Central Bank and the share capital of the society from out of the capital of the assessee company. Thus, it is clear that the debenture loan was raised for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business. Therefore, the expenditure incurred for raising this debenture loan is properly attributable to capital and is of the nature of capital expenditure. The fact that the payment which is part of the expenditure incurred for raising the debenture loan is made periodically does not affect the question and does not convert this expenditure into a revenue expenditure. Applying the above tests laid down by the Supreme Court, we hold, on an appreciation of the whole situation, that the expenditure in question incurred in this case is of the nature of capital expenditure and not revenue expenditure and is not a deductible allowance under section 10, clause (2), sub-clause (xv), of the Indian Income-tax Act.
Section 12 in The Income Tax Act, 1961 [Entire Act]
Section 66 in The Income Tax Act, 1961 [Entire Act]
Western India Plywood Ltd., Baliapatam vs Commissioner Of Income-Tax, Madras on 1 January, 1960
In our opinion, the decision of the Kerala High Court in Western India Plywood Ltd. v. Commissioner of Income-tax also relied upon by the learned counsel for the department is against the assessees contention in this case. In that case, the assessee, a company carrying on business as manufacturer of plywood and plywood articles, raised a loan of Rs. 3 lakhs by way of first mortgage debentures redeemable in three successive years at Rs. one lakh every year to be utilised towards the working capital of the company. In issuing the debentures the company incurred Rs. 12,924 by way of expenses towards purchase of stamp paper for the trust deed, underwriting commission and registration and lawyers fees. The question was under section 10(2) (xv) of the Income-tax Act as a deduction. The learned judges held that the expenditure of Rs. 12,924 incurred by the company to raise the loan was a capital expenditure and was not therefore deductible under section 10(2) (xv). It was further held that :
1