9911796707
TMI Blog1970 (8) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... aid in 1948 to the trustees under the deed of trust were allowable as an amount wholly and exclusively expended for the purpose of its business. In the subsequent years of assessment the company claimed allowance of the annual payment of Rs. 4,364. The Income-tax Officer disallowed the claim. The company disputed the decision and carried it to the Income-tax Appellate Tribunal. The Tribunal submitted a statement of case to the High Court of Calcutta on the question whether the payments "constituted 'expenditure' within the meaning of that word in section 10(2)(xv) of the Indian Income-tax Act, 1922, in respect of which a claim for deduction can be made subject to the other conditions mentioned in that clause being satisfied". The High Court answered the question in the negative. The view taken by the High Court was confirmed by this court in appeal : Indian Molasses Co. (P.) Ltd. v. Commissioner of Income-tax. This court held that the expenditure deductible for income-tax purposes is one towards a liability actually existing at the time, but a sum of money set apart which may be deemed appropriated to a purpose for which it was intended on the happening of a future event was not ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresented a revenue expenditure ?" The High Court of Calcutta recorded answers in the affirmative on both the questions. With certificate granted by the High Court under section 66A(2) of the Indian Income-tax Act, 1922, this appeal is preferred by the Commissioner of Income-tax. Answer recorded by the High Court on the first question was, in our judgment, correct. This court had in the earlier decision, Indian Molasses Co. (Private) Ltd. v. Commissioner of Income-tax, held that the company had not parted with control over the amounts set apart between the years 1948 and 1954 for securing the pension benefit to Harvey, and on that account no amount was appropriated to make it expenditure within the meaning of section 10(2)(xv) of the Act when Harvey died. At the date when different sums of money were set apart there was no existing liability and the sums of money set apart to meet an obligation which may or may not arise on the happening of a future event, the company did not lay out or expend the sums within the meaning of section 10(2)(xv) (sic). The amounts set apart became subject to the obligation to pay the pension arranged to be given only when Harvey died and must be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject to sub-section (4A) of section 10) a permissible allowance in the computation of taxable income of the business, if it be established that the allowance claimed is (a) expenditure which is not of the nature described in clauses (i) to (xiv) of section 10(2) ; (b) that it is hot of the nature of capital expenditure or personal expenses of the assessee ; and (c) that the expenditure was laid out or expended wholly and exclusively for the purpose of such business, profession or vocation. The expenditure incurred by the company is not allowance of the nature described in any of the clauses (i) to (xiv) inclusive of section 10(2), nor is it of the nature of capital expenditure or personal expenses of the assessee. In our judgment, the argument advanced before the High Court that the expenditure resulting from the setting apart of the money for securing an annuity to provide pensionary benefit to Harvey and his wife was of a capital expenditure was rightly negatived by the High Court. To attract the exemption under section 10(2)(xv) it had still to be established that the amount set apart was laid out or expended wholly and exclusively for the purpose of the business of the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture was not laid out or expended wholly and exclusively for the purpose of the business of the company was not argued, and since the question raised and referred "was not wide enough to include that submission", the Commissioner could not urge it before them. We are unable to hold that the decision in Scindia Steam Navigation Co. Ltd.'s case supports the opinion of the High Court. The plea that the amount claimed to have been expended was not admissible as an allowance was raised by the department. The Appellate Assistant Commissioner had decided in favour of the department and the order was sought to be supported before the Tribunal by the departmental representative. Granting that an aspect of the question was not argued before the Tribunal, the question was on that account not one which did not arise out of the order of the Tribunal. In our judgment, the expression "question of law arising out of such order" in section 66(1) is not restricted to take in only those questions which have been expressly argued and decided by the Tribunal. If a question of law is raised before the Tribunal, even if an aspect of that question is not raised, in our judgment, that aspect may be urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le one, having its impact at one point, or it may be a complex one, trenching over an area with approaches leading to different points therein. Such a question might involve more than one aspect, requiring to be tackled from different stand-points. All that section 66(1) requires is that the question of law which is referred to the court for decision and which the court is to decide must be the question which was in issue before the Tribunal. Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal. It will be an over-refinement of the position to hold that each aspect of a question is itself a distinct question for the purpose of section 66(1) of the Act." The second question raised in the present case, in our judgment, permits an enquiry whether the amount claimed is an admissible allowance under section 10(2)(xv). We are unable to hold that it is restricted to an enquiry whether the expenditure is of a capital nature. The Tribunal did not consider whether the amount was laid out or expended wholly and exclusively for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
