1998 (12) TMI 7

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..... respondent would show that the purchase price of the plant and machinery, which had been advanced to the respondent by Lucas (England), would be satisfied with the issue by the respondent to Lucas (England) of its equity shares at par of an equivalent value. The question that arose, therefore, was whether the said agreement had created any debt towards the supply of plant and machinery by Lucas (E .....

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..... Kesoram Industries and Cotton Mills Ltd. v. CWT [1966] 59 ITR 767. This court there referred to English judgments and the judgments of this court to determine what a debt was. It held that a debt was a sum of money which is now payable or will become payable in future by reason of a present obligation. It added that "a liability depending upon a contingency is not a debt in praesenti or in futuro .....

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..... e shares cannot be allotted that the question of compensating Lucas (England) in cash might arise. We do not think that, in these circumstances, it can be said that there was a debt owed by the respondent to Lucas (England) to be taken into account for the purposes of computing the capital under section 801. The appeals are, therefore, dismissed. No order as to costs.
Case laws, Decisions, Ju .....

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