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TMI Blog2007 (5) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... KUMAR and RAJESH BINDAL JJ. S. K Garg Narwana, for the Commissioner. Rajesh Garg, for the assessee. JUDGMENT The Judgment of the Court was delivered by M. M. Kumar, J. - On the directions issued by this Court in Income tax Case No. 69 of 1983 on 25.8.1988, the Tribunal was directed to refer the following question of law for the opinion of this Court: " Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that the assessee corporation was entitled to the deduction of the sum of Rs.207428/- for the assessment year 1977-78?" 2. The facts are not in dispute. The assessee is a corporation which is registered as a company under the Companies Act,1956 and is known as Punjab State Industrial Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration the return of income declaring a loss of Rs. 4,91,429/- was filed on 20.6.1979 which was revised on 27.12.1979 declaring the loss of Rs. 4,35,127/-. The Corporation had advanced Rs. 6,65,242/- to M/s Punjab Con-cast Steels Ltd. during the accounting period relating to the assessment year 1972-73. An amount of Rs. 9,50,000/- stood advanced during the assessment year 1973-74 and Rs.15,98,000/- for the assessment year 1974-75 which constituted brought forward amount of Rs. 7,00,000/- and fresh loans of Rs. 8,98,000/-. The assessee received interest for the afore-mentioned three assessment years amounting to Rs. 64,724/-, Rs. 34,136 and Rs. 1,08,567/-. The amount of interest was assessed in the hands of the assessee in the respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n further appeal to the Income Tax Appellate Tribunal, the issue was decided in favour of the Corporation- assessee. The view of the Tribunal is discernible from the perusal of para 11 which reads as under: " In the case of Sassoon J. David and Co., [1979] 118 ITR 261 the Supreme Court observed that ordinarily, it is for the assessee to decide whether any expenditure should be incurred in the course of his or its business. Such expenditure may be incurred voluntarily and without any necessity and if it is incurred for promoting the business and to earn profits the assessee can claim deduction even though there was no compelling necessity to incur such expenditure. The Allahabad High Court in the case of CIT v. J. K. Bankers, [1979] 120 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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