1968 (7) TMI 2 - SC - Income Tax

Claim for allowance - appellant-company started negotiations with a bank for securing overdraft facilities for the purpose of its business and in that connection had to incur an expenditure of Rs. 35,800 - Tribunal was not justified in holding that the sum of Rs. 35,800 incurred by the assessee for the purpose of raising or securing overdraft facilities from the bank was an expenditure of a capital nature not allowable under s. 10(2)(xv) - Assessee s appeal allowed

Summary

The Supreme Court allowed the appeal, stating that the expenditure of Rs. 35,800 incurred by the appellant-company for securing overdraft facilities was of revenue nature and allowable under section 10(2)(xv) of the Indian Income-tax Act, 1922. The court referred to the principle established in India Cements Ltd. v. Commissioner of Income-tax to support its decision.