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1 - 7 of 7 (0.26 seconds)Section 6 in The Income Tax Act, 1961 [Entire Act]
Section 13 in The Income Tax Act, 1961 [Entire Act]
J.B. Advani & Co. Ltd. vs Commissioner Of Income-Tax And Excess ... on 17 March, 1950
The learned Judges proceeded to refer to a ruling of the
Bombay High Court J. B. Advani v. Commissioner of Income-
tax(1)-and held that the respondent satisfied both the tests
laid down there as applicable in such cases : He was charged
with regard to a transaction which took place in the
ordinary course of business and he was charged in his
capacity as a trader. "If these two tests were satisfied
and the Court came to the conclusion that the primary object
of incurring the expenditure was to protect the good name of
business, then it could be said that the expenditure was
wholly and exclusively for the purposes of the business".
The learned Judges accordingly answered the question
referred to them in the affirmative. They, however, granted
a certificate under section 66-A (2) of the Act that the
case is a fit one for appeal to this Court.
Commissioner Of Income Tax, Bihar & ... vs Maharajadhiraja Sir Kameshwar Singh Of ... on 17 October, 1939
and sub-Section (2) defines "unreasonable consideration".
The framers of the Ordinance thus appear to have regarded
the offence as one calling for a deterrent punishment in
view of its antisocial character, and it is idle to suggest
that it is for the Income-tax authorities to prove in such
cases that the conviction might result in a sentence of
imprisonment and that$ in the absence of such proof, there
was, at the most, only a chance of conviction and fine. We
cannot appreciate the remark that "even this chance of con-
viction and fine was so inextricably mixed up with the main
purpose of the defence that it could, be ignored." A finding
arrived at on this line of reasoning is obviously vitiated
by a serious misapprehension regarding the risk involved in
a prosecution under the Ordinance and it cannot be regarded
as binding on the Court in dealing with the reference. If,
as the High Court realised, in every criminal prosecution
where the matter is defended to protect the good name of a
business or a professional man, the fear of possible fine or
imprisonment must always be there, it must ordinarily be
difficult for any Court to say, that the expenses incurred
for the defence, -even if they are not to be regarded as the
"personal expenses" of the person accused, constituted
"expenditure laid out or expended wholly and exclusively for
the purposes of the business". Learned counsel for the
respondent frankly admitted that he was not able to find a
single case in the books where the expenses incurred by, a
person exercising a trade or profession in defending a
criminal prosecution, which arises out of his business or
professional activities, were allowed to be deducted in the
assessment of his profits or gains for income-tax purposes.
Reference was made in the course of argument to numerous
cases where legal expenses incurred in civil litigation,
arising out, of matters incidental to the carrying on of a
business, were allowed as, a deduction in the computation of
its-profits, e.g.Commissioner of Income-tax v.
Maharajadhiraj of Darbhanga(1), where
(1) (1942) L.R. 69 I.A. 15.
Income Tax Rules, 1962
The Hoarding and Profiteering Prevention Ordinance, 2000
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