1974 (12) TMI 7 - HC - Income Tax

Business Expenditure Capital Expenditure Double Taxation Relief Enduring Benefit Provision For Relief Question Of Fact Relief From Double Taxation Tax Deducted

Summary

Issues:
1. Claim to unilateral relief under section 49D for certain assessment years.
2. Claim for deduction under section 10(2)(xv) for a specific contribution.
3. Assessment of distribution received on the liquidation of a company.

Analysis:

1. Claim to Unilateral Relief under Section 49D:
The Court referred to a previous decision in Commissioner of Income-tax v. Tata Sons P. Ltd., where it was concluded that the question of unilateral relief under section 49D was in favor of the assessee. As a result, the Court answered this question in favor of the assessee for the mentioned assessment years.

2. Deduction under Section 10(2)(xv) for Contribution:
The main issue revolved around the deduction claimed by the assessee for contributing Rs. 1,00,000 to Ahmedabad Advance Mills during its golden jubilee celebrations. The Income-tax Officer and the Appellate Assistant Commissioner disallowed the claim, considering it as capital expenditure. However, the Tribunal found that the contribution was made for the business interests of the assessee and was reasonable. The Tribunal held that the expenditure was admissible under section 10(2)(xv) as it was made to earn more commission. The Court referred to the Supreme Court's decision in Commissioner of Income-tax v. Chandulal Keshavlal and Co. and upheld the Tribunal's decision, stating that it was a question of fact whether the expenditure was wholly and exclusively for the purpose of the business.

3. Assessment of Distribution on Liquidation:
Regarding the assessment of distribution received on the liquidation of Air India International Ltd., the Court noted that the assessee had already secured the desired relief, making the question irrelevant. Therefore, the Court did not answer this question as it did not survive.

In conclusion, the Court answered the questions in favor of the assessee for the relevant assessment years and determined that the contribution made to Ahmedabad Advance Mills was an admissible deduction under section 10(2)(xv) based on the business interests of the assessee. The Court also highlighted the importance of factual findings in determining the allowability of deductions under the Income-tax Act.