9911796707
|
Home
Issues:
1. Deduction of interest on unsecured debentures under section 24(1)(vi) for assessment years 1968-69 and 1969-70. 2. Allowance of municipal taxes under section 23(1) for the assessment year 1968-69. Analysis: 1. The first issue pertains to the deduction claimed by a company for interest on unsecured debentures for the assessment years 1968-69 and 1969-70. The Income-tax Officer initially disallowed the claim, but the Appellate Assistant Commissioner accepted it. The Commissioner determined that the property was purchased using borrowed capital. The Tribunal allowed the deduction based on fresh documents presented, despite objections from the departmental representative. The Tribunal referred the matter back to the Income-tax Officer to ascertain if the property was acquired with loan capital. The High Court noted that the Tribunal did not make a definitive finding on the property's initial purchase source but opined that if it was bought with borrowed capital, the deduction should be allowed. Consequently, the High Court ruled in favor of the assessee, affirming the Tribunal's decision to permit the deduction of interest on unsecured debentures under section 24(1)(vi) for the two assessment years. 2. The second issue concerns the allowance of municipal taxes for the assessment year 1968-69. A judgment by the Small Causes Court retroactively revised municipal taxes from the fourth quarter of 1962-63, fixing the assessee's additional liability at Rs. 10,838. This liability accrued during the relevant accounting period for the assessment year 1968-69. As the liability was established during this period, the High Court upheld the deduction of Rs. 10,838 for municipal taxes. Therefore, the High Court answered the second question in favor of the assessee. The judgment was unanimous, with both judges concurring on the decisions made. The High Court did not award costs in this matter.
|
