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TMI Blog1969 (1) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... . 198 of 1965, the assessee is the Dehra Dun Tea Company Ltd., Dehra Dun, and in reference No. 199 of 1965, the assessee is the East Hope Town Estate Co. Ltd., Dehra Dun. The Dehra Dun Tea Company Ltd. was assessed to U.P. large land holdings tax on the land holding held by it for the years 1959-60, 1960-61 and 1961-62. The tax assessed in respect of the first year is Rs. 72,167, in respect of the second year Rs. 74,248, and in respect of the third year Rs. 73,356. The East Hope Town Estate Co. Ltd. was taxed to Rs. 19,346 for the year 1959-60, Rs. 19,498 for the year 1960-61 and Rs. 20,080 for the year 1961-62. Their assessments were not disturbed up to the stage of appeal before the Income-tax Appellate Tribunal (hereinafter referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, 1922 ? " Mr. Pachauri, who has appeared on behalf of the aforesaid assessees, has contended that the sums paid by the two companies mentioned above by way of U.P. Large Land Holdings Tax Act were paid to the Government because the two companies aforesaid were using the land for which they are assessed for carrying on the business of tea plantation. Learned counsel submitted in this case that there is a direct relationship between the land holding and the business of manufacturing tea. The correct position with regard to the U.P. large land holdings tax is that it is a tax on holdings and not one on the annual value or capitalised value of the land, nor is it a tax on the person who holds the land : see Oudh Sugar Mills Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or an allowance under clause (xv) of section 10(2) was made by the assessee on the ground that the wealth-tax that it had paid was in the nature of business expenditure incurred by it because its wealth constituted the capital invested in its business. The Supreme Court repelled the submission made on behalf of the Travancore Titanium Product Ltd. on the ground that " every item of expenditure merely because it is connected with the trade may not necessarily be treated as a permissible deduction ". Their Lordships observed that a fairly reliable approach for determining what may be regarded normally as the expenditure laid out or expended wholly and exclusively for the purpose of the business was suggested in Strong and Co. of Romsey Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be directly and intimately connected with the business and be laid out by the taxpayer in his character, is a trader. To be a permissible deduction, there must be a direct and intimate connection between the expenditure and the business, i.e., between the expenditure and the character of the assessee as a trader, and not as owner of assets, even if they are assets of the business. " It is true that the aforesaid case is not one under the U.P. Large Land Holdings Tax Act, but is one under the Indian Wealth-tax Act, but what their Lordships have said in that case applies to the case before us also. We have already pointed out earlier that there is no direct and intimate connection between the large land holdings tax paid and the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X
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