TMI Blog1996 (2) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... s not allowable in computing the total income of the assessee ? " The assessee, being a limited company, was incorporated on July 7, 1976, and the company became one of the partners of the firm styled as National Soap Industries with effect from August 1, 1976. The said firm originally had two partners, viz., Jaikishan and Jagdishchander. The company, by virtue of it becoming a partner in the said firm, became entitled to one-third share of the firm. Before the assessee joined the partnership, the partners on July 31, 1976, created goodwill of the firm to the extent of Rs. 2,10,000 and the two partners credited their capital accounts with Rs. 1,05,000, respectively. The said firm was dissolved on December 31, 1976, and as a consequence th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Officer. Aggrieved against the order of the Income-tax Officer, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) and the Commissioner of Income-tax (Appeals) agreed with the findings of the Income-tax Officer. Thereafter, the matter was taken up before the Tribunal and the Tribunal also affirmed the same. Hence, the aforesaid question of law has been referred by the Tribunal for answer of this court. We have heard learned counsel for the parties and perused the record. The basic question for answer before us is that as per clause 12 of the agreement, the partners, viz., Jaikishan and Jagdish Chander, shall be paid Rs. 10 per ton each on the soap manufactured by the continuing partner provided that the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereupon, the two companies came to an agreement whereby : (i) H. V. Low and Co. would not export coal to Burma during the subsistence of the agreement (ii) it would assist the assessee in procuring coal for shipment to Burma (iii) the assessee would carry on the coal shipping business and pay H. V. Low and Co. 5 annas (subsequently raised to Re. 1 as. 5) per ton of coal shipped to Burma. Pursuant to this agreement, the assessee made various payments to H. V. Low and Co. or their nominees during the accounting periods relevant to the assessment years 1951-52 to 1955-56. The assessee claimed these payments as admissible business expenditure. The Tribunal held that the agreement arrived at between the assessee and H. V. Low and Co. was a tempo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no certainty of duration for such an advantage and the same could be put an end to at any time. Thus, what the extent of durability or permanence should be depends on the facts of each case. " In a subsequent decision given by the Madras, High Court in Chelpark Co. Ltd. v. CIT [1991] 191 ITR 249, their Lordships have taken a similar view. There are number of decisions in which similar view has been taken and we are not inclined to overburden this judgment to refer to all these cases. Thus, in view of ratio laid down by the Supreme Court in the case of Coal Shipments P. Ltd. [1971] 82 ITR 902 and after examining the facts of this case, it is more than evident that the assessee wanted to outbid his competitor and wanted that these two pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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