9911796707
TMI Blog1966 (3) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... ly determined under the Act, was paid, a sum of Rs. 22,438 was paid by the assessee as interest as required under section 34 of the Land Acquisition Act. The assessee claimed that payment as an expenditure to be deducted from his total income under section 10 of the Income-tax Act. He claimed the deduction particularly under sub-clause (iii) of clause (2) of section 10, which was disallowed by the Income-tax Officer on a finding that it was not paid on any capital borrowed. The Appellate Assistant Commissioner took the same view. When the matter came before the Tribunal at the instance of the assessee, the deduction was allowed. The Tribunal took the view that the payment of interest under section 34 of the Land Acquisition Act was not an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was admissible under sub-clause (xv). On the facts of the case, the deduction cannot be permitted under sub-clause (iii), because the interest was not paid on any capital borrowed for the purposes of the business. Learned counsel appearing for the assessee wanted to establish that sub-clause (iii) of clause (2) of section 10 of the Income-tax Act would be attracted to the present case. But he could not substantiate that position either with citation of any authority or with any argument with reference to the facts involved in the present case in regard to the acquisition of the land or the payment of interest in that connection. His argument, however was more emphatic relying upon the provision under sub-clause (xv) of sub-section (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not of the nature of capital expenditure. Whether it was spent wholly and exclusively for the purpose of the business of the assessee-company will depend for what purpose the land was sought to be acquired by the Government. Section 6 of the Land Acquisition Act provides that when the appropriate Government is satisfied that any particular land is needed for a public purpose, or for a company, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorised to certify its orders, provided that no such declaration shall be made unless the compensation to be awarded for such property is to be paid by a company, or wholly or partly out of public revenues or some fund control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Act itself, and the consent of the Government was given after a due enquiry held in that respect and an agreement was executed by the company with the Government. No doubt, this aspect of the question does not appear to have been considered by the Tribunal, but in view of the fact that there was no dispute that the land was acquired for the assessee-company by the Government under the Land Acquisition Act, it can be safely presumed that the acquisition was for the purpose of the business of the company. The payment of interest under consideration was in relation thereto. Therefore, we are of the view that the expenditure claimed by the assessee-company would come within sub-clause (xv) of clause (2), of section 10 of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
