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2001 (10) TMI 23 - HC - Income TaxBusiness Expenditure, General Principles, Mercantile System Of Accounting - "Whether, on the facts and in the circumstances of the case, the sum of Rs. 1 lakh debited in the accounts as payable to Chunilal Pranjivandas and Co. for the use of their office, telephone, staff and other facilities was a deductible item of expenditure?" - Before parting, we may observe that the provisions of section 41(1) of the Act provide for a safeguard in an eventuality where the, liability is allowed as a deduction in the particular assessment year and subsequently on remission or cessation thereof, the assessee obtains some benefit as regards the same in a subsequent year. We, therefore, hold that the assessee was entitled to the deduction of Rs.1,00,000 debited in the accounts as payable to Chunilal Pranjivandas and Co. for the use of their office, telephone, staff and other facilities and the Tribunal was not justified in denying such claim. The question referred to us is, therefore, answered in the affirmative, i.e, in favour of the assessee and against the Revenue.
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