TMI Blog1996 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... Court rejecting an application under section 256(2) of the Income-tax Act, 1961. The Revenue had applied for referring the following two questions for the opinion of the High Court : " (i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the professional charges paid by the assessee-company to its solicitors for effecting the amalgamation of Nawrosjee Wadia Ginning and Pressing Company with it, was of revenue nature and should be allowed as a deduction in the computation of its total income ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the 'assessee-company' was entitled to a deduction for a sum of Rs. 2,25,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was of the opinion that "as both the companies were carrying on complementary business and their amalgamation was necessary for the smooth and efficient conduct of the business", it is an expenditure laid out wholly and exclusively for the purpose of the business of the assessee. In view of the said finding and also in view of the decision of this court in Bombay Steam Navigation Co. (1953) Pvt. Ltd. v. CIT [1965] 56 ITR 52, we are of the opinion that the Tribunal was right in its conclusion. The decision in Bombay Steam Navigation [1956] 56 ITR 52 also pertains to amalgamation of two shipping companies. The assessee-company took over the assets of the other company and part of the price was treated as a loan secured by a promissory note a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Nawrosjee Wadia Ginning and Pressing Company was necessary for the smooth and efficient conduct of the assessee's business. Following the ratio of the aforementioned decisions of the court, we hold that the expenditure incurred towards professional charges of the solicitors firm for the services rendered in connection with the said amalgamation was in the course of carrying on of the assessee's business and, therefore, deductible as a revenue expenditure. In this view of the matter, it is not necessary for us to deal with the other decisions cited before us on this question. Now, coming to the second question, the finding of the Tribunal is that the amount of Rs. 2,25,000 was contributed by the assessee to the Maharashtra Housing Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its premises was not a pucca road and was causing difficulties and inconvenience on several occasions. Along with three other public undertakings, the assessee approached the Kerala Government for laying a new road to that area. While the Government bore the cost of acquisition of land and part of the cost of construction of the road, the remaining cost was met by four companies including the assessee. The question was whether the said expenditure is allowable as a revenue expenditure. This court held that by having the new road constructed for the improvement of transport facilities, the appellant had acquired an enduring advantage for its business and, therefore, the expenditure incurred by the assessee was of a capital nature. Dr. Gauri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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