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South Asia Industries (P) Ltd. vs The Commissioner Of Income-Tax, New ... on 18 February, 1981 cites

Commissioner Of Income-Tax, Andhra ... vs Dhanrajgiri Raja Narasingirji on 7 March, 1973

(5) The Income-tax Officer rejected the claim of the assessed holding that these expenses were not incurred in connection with or in respect of carrying on the business of the company. The Appellate Assistant Commissioner confirmed this disallowance andthe Income-tax Appellate Tribunal held that the expenditure was not an allowable business expenditure especially as a similar claim for the earlier year had been rejected. Distinguishing the decision in Commissioner of Income-tax, A.P. v. Dhanrajgiriji Raja, 77 I.T.R. 318(1) relied on by the assessed, the Tribunal held that such an inquiry could not be considered as a normal hazard of an honest businessman and the expenditure incurred could not be treated as normal business expenditure. The expenditure in the present case having been incurred in connection with an inquiry which was with respect to certain allegations involving acts against public policy on behalf of the members of the group.
Supreme Court of India Cites 4 - Cited by 148 - K S Hegde - Full Document

Birla Cotton, Spinning And Weaving ... vs Commissioner Of Income-Tax on 10 December, 1979

(11) In Birla Cotton Spinning and Weaving Mills Ltd. v. Commissioner of Income-tax, West-Bengal, 82 I.T.R. 166(2), the Supreme Court has observed that it is well settled that the deductibility of an expenditure in prosecuting a civil proceedings does not depend on the final outcome of the proceedings, but on whether it is honestly incurred to promote the interest of the business. The Court opined that "the essential test which has to be applied is whether the expenses were incurred for the preservation and protection of the assessed's business from any such process or proceeding which might have resulted in the reduction of its income and profits, and whether the same were actually and honestly incurred".
Delhi High Court Cites 28 - Cited by 5 - S Ranganathan - Full Document

Parshva Properties Ltd. vs Commissioner Of Income-Tax, Central on 17 December, 1974

(15) We will not advert to numerous other decisions of various High Courts but refer only to the decision in Parshva Properties Ltd. v. Commissioner of Income-tax, Central, Calcutta, 104 I.T.R.631(4) of the Calcutta High Court, where the expenditure incurred was for defending a director, agent and manager of the company who were being criminally prosecuted for violating certain regulations with regard to the working of a mine. In that case, Sabyasachi Mukharji, J. who spoke for the Court, referred to a catena of cases in connection with the deductibility of expenditure incurred for defending criminal and other prosecutions. The learned Judge started with the Supreme Court decisions in Commissioner of Income-tax, West Bengal is H. Hirjee, 23 I.T.R. 427(5) Haji Aziz and Abdul Shakoor Bros.
Calcutta High Court Cites 17 - Cited by 10 - S Mukharji - Full Document

The Commissioner Of Income-Tax vs Chaman Lal & Bros. on 2 March, 1967

v. Commissioner of Income-tax, Bombay City-11, 41 I.T.R. B 351(6), Sree Meenakshi Mills Ltd., v. Commissioner of Income-tax, Madras, 63 I.T.R. 207(7) and Commissioner of Income-tax, Andhra Pradesh v. Dhanra]'girji Raja Narasingirji, 91 I.T.R. 544 (noticed earlier) and went on to deal with the various decisions of the High Courts including a decision of this Court in Commissioner of Income-tax, Delhi & Rajasthan v. Chaman Lal and Bros., 77 I.T.R.. 383(8). From these decisions he has culled out the principles that emerge at page 641 as follows : "(1)The question of deductibility of expenditure of this nature must depend on the purpose and nature of the expenditure incurred, (2) in order to determine whether the expenditure was deductible or not, it is necessary to find out in what capacity the expenditure was incurred, (3) the ultimate result or decision on which the expenses were incurred does not in any way affect the question of allow ability of the expenditure. The aim and purpose of incurring the expenditure should also be examined, and (4) but a penalty for not, following the law is not an expenditure which can be said to be incurred by the assesses in the course of his business."
Delhi High Court Cites 16 - Cited by 44 - K S Hegde - Full Document
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