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TMI Blog1971 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... t liquidators were appointed. Upon subsequent litigation in relation to the winding-up of the company, the High Court made an order dated November 8, 1949, directing the company to be wound up under the supervision of the court. On February 3, 1950, the court also directed the liquidators to submit a report every three months respecting the progress of the winding-up proceedings and realisation of assets. The liquidators, in the course of the winding-up, realised amounts due to the company from time to time and put them in fixed deposits with certain banks. For the assessment year 1962-63 (the relevant previous year being the calendar year 1961), the income from interest on the fixed deposits amounted to Rs. 13,965. The company, during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business activity carried on heretobefore by the company. The assessee could not be said to have carried on a business or profession within the meaning of section 28, and, therefore, the income from interest on fixed deposits had to be treated from "other sources" under section 56. The only deductions allowable were those permitted under section 57, and they consisted of expenditure incurred for the purpose of making or earning income from other sources. The Tribunal pointed out that the expenses did not appear to be of that nature. At the instance of the assessee the Tribunal has referred the following question : Whether, on the facts and in the circumstances of the case, the sum of Rs. 13,023 is an admissible charge against the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of sugar. For the purpose of carrying on that business it was empowered to erect a sugar mill, manufacture sugar machinery parts, purchase or produce sugar beet, sugarcane and manufacture molasses, alcohol, etc., etc., and for the purpose construct and operate sugar refineries, distilleries, mills and factories. There was also a provision for advancing and lending money on assets of all kinds, investment of the company's moneys and dealing in debentures, shares, stocks and other securities and carrying on various other businesses such as the company considered desirable in lieu of any other business which it was authorised to carry on. Those provisions are contained in clauses 21, 28, 35 and 40 of the memorandum of association. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the fixed deposits has to be considered as income from "other sources", and only that expenditure can be deducted from it which under section 57 can be considered as incurred for earning that income. The Tribunal has found that the expenses claimed are not related to that income, and this finding has not been shown to be erroneous in law.
In our judgment, the sum of Rs. 13,023.63 is not an admissible deduction against the interest income earned by the assessee during the previous year. Accordingly, we answer the question referred in the negative.
The Commissioner of Income-tax is entitled to his costs, which we assess at Rs. 200. Counsel's, fee is assessed in the same figure.
Question answered in the negative. X X X X Extracts X X X X X X X X Extracts X X X X
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