Court : Mumbai
Reported in : (1949)51BOMLR708
..... the question that arises on this reference is', whether a certain amount paid by an employer to his employees is a valid deduction under section 10(2)(xv) of the indian income-tax act,' 1922, and in order to determine it we have got to consider whether it is an expenditure laid out or expended wholly and exclusively for the purpose of the business of the assessee. ..... the basis of the excess profits tax act is that substantially the very income which is liable to tax for income-tax is also liable to tax for excess profits tax under the excess profits tax act, and, therefore, in order to arrive at the total income of the assessee for both purposes the question whether deductions are permissible under section 10 or not have to be considered. ..... the excess profits tax act gives wider powers to the excess profits tax officer and that is that although a deduction may be permissible under the income-tax act, he may still disallow it under the excess profits tax act. ..... the contention of the assessee was that the disallowance with regard to this sum was made under rule 12 of schedule i to the excess profits tax act, and before a disallowance can be made under that rule the consent of the commissioner of excess profits tax was necessary, and in this case it is not disputed that the excess profits tax officer did not obtain any such permission of the commissioner of excess profits tax. .....
Tag this Judgment!Court : Mumbai
Reported in : AIR1950Bom29
..... the question that arises on this reference is whether a certain amount paid by an employer to his employees is a valid deduction under section 10 (2) (xv), income-tax act, 1922, and in order to determine it we have got to consider whether it is an expenditure laid out or expended wholly and exclusively for the purpose of the business of the assessee. ..... the basis of the excess profits tax act is that substantially the very income which is liable to tax for income-tax is also liable to tax for excess profits tax under the excess profits tax act, and, therefore, in order to arrive at the total income of the assessee for both purposes the question whether deductions are permissible under section 10 or not has to be considered. ..... the excess profits tax act gives wider powers to the excess profits tax officer and that is that although a deduction may be permissible under the income-tax act, he may still disallow it under the excess profits tax act. ..... the contention of the assessee was that the disallowanc with regard to this sum was made under rule 12 of schedule 1 to the excess profits tax act, and before a disallowance can be made under that rule the consent of the commissioner of excess profits tax was necessary, and in this case it is not disputed that the excess profits tax officer did not obtain any such permission of the commissioner of excess profits tax. .....
Tag this Judgment!Court : Mumbai
Reported in : [1949]17ITR533(Bom)
..... - the question that arises on this reference is whether a certain amount paid by an exployer to his employees is a valid deduction under section 10(2)(xv) of the indian income-tax act, 1922, and in order to determine it we have got to consider whether it is an expenditure laid out or expended wholly and exclusively for the purpose of the business of the assessee. ..... sum was made under rule 12 of schedule i to the excess profits tax act, and before a disallowance can be made under that rule the consent of the commission of excess profits tax was necessary, and in this case it is not disputed that the excess profits tax officer did not obtain any such permission of the commissioner of excess profit tax, rule 12 gives the excess profits tax officer power to refuse to allow any deduction which in his opinion is in excess ..... but in this case, as the deduction was disallowed under the income tax act itself, no question arose ofdisallowing it under rule 12 of schedule i of the act, and, therefore, no question to the necessity of the permission of the commissioner of excess profits tax arises.now, there is one either important question as to procedure which arises on this reference. ..... the basis of the excess profits tax act is that substantially the very income which is liable to tax for income-tax is so liable to tax for excess profits tax under the excess profits tax act. .....
Tag this Judgment!Court : Mumbai
Reported in : [1949]17ITR595(Bom)
..... in that case this court held that the expenditure incurred for applying for trade mark under the trade marks act was an expenditure attributable to revenue inasmuch as it was recurring and it did not bring into existence an asset or an advantage for the enduring benefit of the trade and also that the expenditure was incurred wholly and exclusively for the purpose of the assessees business.now in this case the assessees, the ..... the trade mark is only seven years it does not possess that permanency which is required inorder to make the expenditure a capital expenditure and in order to bring into existence a benefit of an enduring character. ..... special right does come into existence, which i very much doubt, what we held in the decided case was that such a right must be of an enduring character in order to make the expenditure a capitl expenditure. ..... the expenditure incurred by them with regard to the registration of their trade mark was a revenue expenditure. ..... under the trade marks act, a right to file a suit exists in respect of all trade marks which are registered, whether they were in existence prior or subsequent to the february 25, 1937; but a special concession is made in favour of trade marks ..... this on the ground that the case of the assessees was distinguishable from the case which we decided in commissioner of income-tax, bombay city v. ..... we have to consider in this reference is wholly covered by a recent decision of this court reported in commissioner of income-tax, bombay city v. .....
Tag this Judgment!Court : Mumbai
Reported in : (1950)52BOMLR169
..... that paragraph provides that in computing profits or gains of a business for the purpose of income-tax an allowance is to be made for 'any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly or exclusively for the purpose of such business. ..... this appeal raises a short question as to the application of section 10(5) para, xii of the indian income-tax act, 1922, as amended by the indian income-tax (amendment) act, 1939, in respect of assessments on the appellants for the years 1940-41 and 1941-42. ..... their lordships feel no doubt that in a business sense this expenditure is expenditure on revenue account and not on capital account just as much as if the tendu leaves had. ..... 'that,' said the learned judge,is a current expenditure, and does not become a capital expenditure merely because the material is provided by something like a forward contract, under which a person for the payment of a lump sum down secures a supply of the raw material for a period extending over several years.7. ..... the claim was one equivalent to a claim to deduct the expenditure made in acquiring the land for it was a claim to deduct the amount carried year by year to a sinking fund set up to meet the exhaustion of the caliche. ..... the question, therefore, resolves itself into the short one-is expenditure of this character made in acquiring one of the raw materials of the appellant's manufacture capital expenditure within the meaning of this act? .....
Tag this Judgment!Court : Mumbai
Reported in : AIR1950Bom383; (1950)52BOMLR415; [1950]18ITR460(Bom)
..... in that case their lordships recognised, and decided cases show, how difficult it is to discriminate between expenditure which is and expenditure which is not solely expended and incurred for the purpose of earning profits or gains, but however difficult the task it has got to be attempted and we have to decide whether this particular deduction claimed by the assessee company as a deduction is expenditure laid out or expended wholly and exclusively for the purposes of the business of the assessee company. ..... it must be a deduction which falls under one or the other heads of section 10 and unless the assessee satisfies the income-tax authorities that the claim that he is making with regard to the deduction under section 10(2)(xv) falls strictly within its compass and ambit, the assessee would not be permitted that deduction. ..... but even a voluntary act if performed for commercial expediency would still be an expenditure falling within section 10(2)(xv) if it can be shown that it was intended for the purpose of making or increasing the profits of the assessee company. ..... we were also referred to a case reported in 8 tax cases at page 676 robert addie & sons collieries v. ..... , the well-known atherton's case, reported in 10 tax cases at page 155. ..... commissioner of income-tax referred to above. 9. ..... it is not every deduction that is a permissible deduction under the income-tax law. ..... commissioner of income-tax. ..... commissioner of income-tax . ..... commissioner of income-tax. .....
Tag this Judgment!Court : Mumbai
Reported in : AIR1950Bom269; (1950)52BOMLR424; [1950]18ITR750(Bom)
..... that arises on this reference is the interpretation of certain provisions of the excess profits tax act, and the material facts are that the assessee company, the scindia steam navigation co. ..... business contemplated is not one for which preparations are made, for which assets are purchased, for which expenditure is incurred, but which has not reached the stage of being carried on and of yielding profits ..... the entity which is charged to tax under the excess profits tax act is a business and the scheme of the act is to have a standard period which is compared to the charging period and the comparison proceeds on what were the profits earned in a business during the standard period and what were the profits earned during the charging period, and in order to arrive at the rate of tax it is necessary to ascertain what was the average amount of capital ..... a part of its capital for the purpose of the excess profits tax act, 1940. ..... contention of the assessee company was that it was entitled to include this sum as a capital employed in its business for computing the average amount of capital according to the rules in schedule ii to the excess profits tax act, 1940. ..... is obviously fallacious when one looks at the object the scheme of the excess profits tax act. ..... findings of fact as constituting the background, we must turn to the relevant provisions of the excess profits tax act. ..... chargeable accounting period which is from the 1st of july, 1940, to 30th june, 1941, it incurred an expenditure of rs. .....
Tag this Judgment!Court : Mumbai
Reported in : [1950]18ITR705(Bom)
..... question that arises on this reference is the interpretation of certain provisions of the excess profits tax act, and the material facts are that the assessee company, the scindia steam navigation co. ..... contemplated is not one for which preparations are made, for which assets are purchased, for which expenditure is incurred, but which has not reached the stage of being carried on and of yielding profits ..... the entity which is charged to tax under the excess profits tax act is a business and the scheme of the act is to have a standard period which is compared to the charging period and the comparison proceeds on what were the profits earned in a business during the standard period and what were the profits earned during the charging period, and in order to arrive at the rate of tax it is necessary to ascertain what was the average amount of capital ..... a part of its capital for the purpose of the excess profits tax act, 1940. ..... contention of the assessee company was that it was entitled to include this sum as a capital employed in its business for computing the average amount of capital according to the rules in schedule ii to the excess profits tax act, 1940. ..... is obviously fallacious when one looks at the object the scheme of the excess profits tax act. ..... findings of fact as constituting the background, we must turn to the relevant provisions of the excess profits tax act. ..... chargeable accounting period which is from the 1st of july, 1940, to 30th june, 1941, it incurred an expenditure of rs. .....
Tag this Judgment!Court : Mumbai
Reported in : AIR1950Bom297; (1950)52BOMLR434; [1950]18ITR557(Bom)
..... the learned chief justice referred to this case and expressed an opinion that the case was of doubtful authority and the reason why they thought that that decision would not be applicable to the income-tax act after it was amended with respect to section 10(2)(xv) was that the limitation for the purpose of earning such profits had been removed from the amended section and all that is required now is ..... first question that we have to consider on this reference is whether certain expenditure incurred by the assessee company as legal expenses are permissible deductions as falling within section 10(2)(xv) of the income-tax act. ..... paid by the company on account of quarters provided free for residence of the directors could be considered to be remuneration within the meaning of rule 7(1) of the rules in scheduled i to the excess profits tax act, the tribunal held that it was directors remuneration and the assessees before us contend that it is not. ..... were leveled against the partners of conspiracy of committing offences against the excise act and the prosecution resulted in an acquatatal of all partners and the partners claimed that the expenditure incurred was a permissible deduction. ..... it is important to note that this test was applied to provision of the english income tax act which in terms corresponds to our section 10(2)(xv). ..... was ultimately compromised and the assessee claimed the expenses of the litigation as an expenditure falling under section 10(2)(xi) of the act as it then stood. .....
Tag this Judgment!Court : Mumbai
Reported in : AIR1951Bom86; (1951)53BOMLR218; ILR1951Bom473
..... had to consider whether a certain sum spent by sir purshottamdas thakurdas in defending a suit filed by shamdasani that his appointment as a director of the eeserve bank of india was invalid, was a permissible deduction under section 12(2), income-tax act, & we took the view that this amount was not a capital expenditure inasmuch as it was hot an expenditure incurred in creating or in orginating the source of income or in bringing it into being, but in preserving it when it was already there. ..... 'property' as used in the constitution must be read & interpreted in its own context & in that context it does not & cannot mean what property may mean when it has got to be considered in the context of the income-tax act & for the purpose of determining a specific issue which arose before the ct. mr. ..... actionable claims to which the company is or appears to be entitled; and (4) the directors appointed under this ordinance shall be for all purposes the directors of the company daly constituted under the companies act & these directors shall alone be entitled to exercise all the powers of the directors of the company, whether such powers are derived from the companies ..... section 12 provides that notwithstanding anything contained in the companies act or in the memorandum or articles of association of the company, (1) it shall not be lawful for the share-holders of the company or any other person to nominate or appoint any person to be a director of the company; (2) no resolution passed at any .....
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