1954 (11) TMI 2 - SC - Income Tax

Whether, in the circumstances of the case, the two sums of ₹ 5,000 and ₹ 35, 000 paid under clauses 4 and 5 of the deed of the 14th November, 1938, were rightly disallowed as being expenditure of a capital nature and so not allowable under section 10(2)(xv) of the Indian Income-tax Act?

Held that:- The conclusion reached by the Income-tax authorities as well as the High Court in regard to the nature of the payments was correct and the sums of ₹ 40,000 paid by the company to the lessors during the accounting years 1944-45 and 1945-46 were not allowable deductions under section 10(2)(xv) of the Act. Appeal dismissed.