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TMI Blog2005 (1) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... of business?" The assessment year is 1982-83 and the relevant accounting period is the financial year ended on March 31,1982. The assessee, a public limited company, wrote off an amount of Rs. 2,51,772 stated to have been incurred on obtaining a lease of land and towards purchase of incomplete building on, the said land, and towards completion of the said building. The case of the assessee is that the property was owned by one Mrs. Dr. L.V. Iyer, wife of one Mr. P.V.R.N. Iyer, who was general manager of the assessee-company. The assessee entered into an agreement for executing a deed of lease and an agreement for sale of property with Mrs. Iyer for a sum of Rs. 1,92,000. On the date of execution of the agreement, i.e., on January 2, 1978, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as the amount spent on construction of the building will not be, claimed by the assessee from Mrs. Iyer. This total sum was written off, in pursuance of the aforesaid resolution dated December 29, 1980, in the accounting period for the year under consideration. The assessee's claim was rejected by the Assessing Officer as well as by the Commissioner of Income-tax (Appeals). The Tribunal has upheld the orders of both the lower authorities in the following terms: "5.4 The cases relied upon by the parties clearly lay down that an expenditure incurred wholly and exclusively for the purposes of the business would be allowable expenditure under the provisions of section 37(1). It is also correct that business expediency must be judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business. In this behalf we fully agree with the view of the income-tax authorities and confirm the disallowance of Rs. 2,51,772." On behalf of the applicant-assessee it was urged that the same transaction was treated as gift by the Revenue authorities and the assessee had succeeded before the Tribunal. That by order of August 28, 1992, rendered in GTA No. 29/Ahd/1989, the Tribunal had held that under the relevant provisions of the Gift-tax Act, it was not necessary that the amount in question should represent expenditure and it was enough if certain benefit was conferred provided that the said benefit has been given bona fide for the purpose of business. According to the Tribunal, therefore, the provisions of section 5(1)(xiv) of the Gif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as modification/addition to the superstructure. Whether such expenditure would be on capital account or not has not been looked into by the Tribunal. Similarly, in the year under consideration the amount has been written off, which was even as per the facts stated by the assessee incurred in January, 1978, and February, 1979, as well as thereafter. Therefore, it was also necessary for the Tribunal, and the authorities to apply their mind to the aspect as to whether the amount was laid out or expended during the accounting period relevant to the assessment year under consideration. The learned advocate for the applicant-assessee initially resisted the course of action suggested by this court of restoring the matter back to the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the expenditure was wholly and exclusively laid out or expended for the purpose of the business of the company. Nor are we able to hold that because before the Tribunal stress was not pointedly laid upon the ingredients which enable an expenditure to be claimed and allowed, the question does not arise out of the order of the Tribunal. The matter in dispute before the Tribunal was whether the company was entitled to the allowance under section 10(2)(xv) of the Indian Income-tax Act, 1922. The Tribunal considered whether the amount claimed to have been laid out or expended became expenditure within the meaning of section 10(2)(xv) on the death of Harvey, and whether it was capital expenditure. They did not consider whether the expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business of the company and has not considered all appropriate provisions of the statute applicable thereto. It will be open to the Tribunal to dispose of the appeal under section 66(5) of the Indian Income-tax Act, 1922, in the light of the observations made by this court after determining the questions which ought to have been decided." Applying the aforesaid ratio to the facts of the case and adopting the same course, the court feels it would be appropriate to decline to answer the question as the Tribunal has failed to decide the question as to whether the necessary conditions for applicability of section 37 of the Act have been fulfilled or not. The question is accordingly left unanswered. It will be open to the Tribunal to disp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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