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TMI Blog1993 (3) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... red the following question of law arising out of its order dated October 10, 1980, under section 256(1) of the Income-tax Act, 1961, in respect of the assessment year 1976-77 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the finding of the Appellate Assistant Commissioner that the licence fee deficiency of Rs. 37,250 debited to the goods ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed and it was held that it is an expenditure which is allowable under section 37 of the Income-tax Act. The Income-tax Appellate Tribunal confirmed the order of the Appellate Assistant Commissioner. The submission of learned standing counsel for the Department is that, since the purchases were not made to that extent, the amount could not have been debited in the goods account. The true nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d amount was allowable as trading loss. For the purposes of determining the liability under section 37 of the Act, the things which are required to be seen are : (i) that it should be expenditure ; (ii) such expenditure should not be of the nature described in sections 30 to 36 ; (iii) it should not be expenditure in the nature of capital expenditure ; (iv) it should not be the expenditure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of this court, we are of the view that the Income-tax Appellate Tribunal was justified in holding that the finding of the Appellate Assistant Commissioner that the licence fee deficiency debited to the goods account is allowable expenditure.
Accordingly, the reference is answered in favour of the assessee and against the Revenue.
No order as to costs. X X X X Extracts X X X X X X X X Extracts X X X X
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