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TMI Blog1970 (3) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... e is a public limited company. The assessment year relevant to this reference is 1956-57, the corresponding accounting year being the year ended on 30th June, 1955. During the accounting year the assessee-company incurred expenditure of Rs. 1,18,401 in connection with the issue of debentures. The loan secured by the debentures was Rs. 50,00,000. The loan was obtained from the Industrial Finance Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 10(2)(vi) and (vib) respectively. The Tribunal has rejected both these claims. The following two questions of law have been refereed: 1. Whether, on the facts and in the circumstances of the case, the amount of Rs. 1,28,401 was an admissible deduction in arriving at the assessable business profits of the company ? and 2. If the answer to the first question is in the negative, whether, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business and was, therefore, allowable as a deduction under section 10(2)(xv). It was held that the act of borrowing money was incidental to the carrying on of business, the loan obtained was not an asset or an advantage of enduring nature, the expenditure was made for securing the use of money for a certain period and it was irrelevant to consider the object with which the loan was obtained. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned. In the result, on the basis of the principles laid down by the Supreme Court, this expenditure must be treated as revenue expenditure deductible under section 10(2)(xv). We, therefore, answer question No. 1in the affirmative. Question No. 2 has been raised for being answered "if the answer to the first question is in the negative." As our answer to the first question is in the affirmative, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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