Karnataka Court January 1972 Judgments

Commissioner of Income-tax, Mysore Vs. United Breweries

Court: Karnataka

Reported in: [1973]89ITR17(KAR); [1973]89ITR17(Karn)

Govinda Bhat, J.1. This is a reference under section 256(1) of the Income-tax Act, 1961, hereinafter called 'the Act' and it relates to the assessment years 1962-63 to 1965-66. 2. The question of law referred for the opinion of this court is : 'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that part out of the interest paid by the assesses company on capital borrowed by it, as is attributable to advances given by it to its two subsidiaries free of interest, is admissible as deduction under section 36(1)(iii) of the Income-tax Act, 1961, for the assessment years 1962-63, 1963-64, 1964-65and 1965-66 ?' 3. The assessee, United Breweries Ltd., Bangalore, is a public limited company which carries on the business of manufacture and sale of beer. It had several subsidiaries. The two subsidiaries with which we are concerned and : (1) Ruttonjee & Co. Ltd Calcutta, and (2) Darlco Cannings Ltd., Bangalore. The business of Ruttonjee & CO. Ltd was...