1987 (3) TMI 87

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..... r section 256(1) of the Income-tax Act. Counsel are agreed that the answer to the first question is governed by the decision of this court in the assessee's own case in Life Insurance Corporation of India v. CIT [1979] 119 ITR 900, and that the expenditure is deductible. Counsel are agreed that the answers to be given to questions Nos. 3(i) and 3(ii) are governed by the decision of this court .....

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..... accordance with the principles contained in the First Schedule to the said Act was not an expenditure deductible under section (sic) of the Indian Incometax Act, 1922, sections 30 to 43 of the Income-tax Act, 1961?" The assessee took over the business of certain insurance companies. There was a dispute as to the quantum of compensation payable to the insurance companies. There was litigation an .....

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..... asset of the assessee. The Tribunal concluded that the litigations related to the amount of compensation due for the acquisition or taking over of capital asset. It, therefore, disallowed the deduction claimed by the assessee. The assessee, when it acquired the business of the insurance companies, was acquiring a capital asset. The compensation paid in regard to such acquisition was capital expe .....

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