1959 (5) TMI 3 - SC - Income Tax

Whether in view of the fact that the sum of ₹ 43,692-11-9 had been entered on the credit side in the books of account even though it was not money actually received but only money treated as received on the basis that it was due and receivable, the sum of ₹ 24,809 which had been entered as debit, being the liability of the appellant undertaken by it to earn those receipts, should be deducted in determining the taxable profits and gains of the appellant?

Held that:- It is to be noted that the appellant had led evidence before the Income-tax authorities in regard to this estimated expenditure of ₹ 24,809 and no exception was taken to the same in regard to the quantum, though the permissibility of such a deduction was questioned by them relying upon the provisions of section 10(2) of the Act.

It, therefore, follows that the conclusion reached by the High Court in regard to the disallowance of ₹ 24,809 was wrong and it should have answered the referred question in the affirmative. Appeal allowed.