9911796707
TMI Blog1953 (4) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... assessments have to be made for every year and cannot be held up until the final result of a legal proceeding, which may pass through several courts, is announced. We allow the appeal and answer the question referred in the negative. - - - - - Dated:- 17-4-1953 - Judge(s) : B. K. MUKHERJEA., GHULAM HASAN., PATANJALI SASTRI., S. R. DAS JUDGMENT The Judgment of the Court was delivered by PATANJALI SASTRI, C.J.--This is an appeal from a judgment of the High Court of Judicature at Calcutta answering a reference under Section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act) in favour of the respondent herein. The respondent carries on business as selling agents of the Bengal Potteries Ltd., and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred by the Income-tax Officer, the Tribunal observed :-- "It may be stated straight off that it has not been established by any material that the conviction in cases like this may end in imprisonment. The question that personal liberty was likely to be jeopardised therefore will not be considered by us............... In any case, in the absence of any material in this particular case that personal liberty was likely to be jeopardised, all that we can say is that there was a chance of conviction in which the respondent might have been fined. No doubt, the element of saving himself from the fine, if any, might be there, but it is so inextricably mixed up with the main purpose for the defence that we are prepared to ignore that little el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." The learned Judges accordingly answered the question referred to them in the affirmative. They, however, granted a certificate under Section 66-A(2) of the Act that the case is a fit one for appeal to this Court. We are unable to agree that the finding of the Tribunal, to which reference has been made, is binding on the Court as a finding of fact and is decisive of the reference. The finding of the Tribunal is vitiated by its refusal to consider the possibility of the criminal proceeding terminating in the conviction and imprisonment of the respondent. As has been stated, the respondent was prosecuted under Section 13 which provides : "Whoever contravenes the provisions of the Ordinance shall be punishable with imprisonment for a term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the person accused, constituted "expenditure laid out or expended wholly and exclusively for the purposes of the business". Learned counsel for the respondent frankly admitted that he was not able to find a single case in the books where the expenses incurred by a person exercising a trade or profession in defending a criminal prosecution, which arises out of his business or professional activities, were allowed to be deducted in the assessment of his profits or gains for income-tax purposes. Reference was made in the course of argument to numerous cases where legal expenses incurred in civil litigation, arising out of matters incidental to the carrying on of a business, were allowed as a deduction in the computation of its profits, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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