1961 (2) TMI 80

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.... legal charges are allowable under section 10(2)(v) and section 10(2)(xv) of the Indian Income-tax Act?" The facts briefly are that the assessee in this case carried on the business of film distribution. He also started the business of film exhibition and made returns in respect of a number of years. It appears that sometime in 1947-48 his machinery was stolen, and so, for three years, the business of film exhibition was not carried on, because apparently he was unable to do. For those three years, therefore, he made no returns and showed no activity of his business so far as the business of film exhibition was concerned. Subsequently, the machinery was recovered and the owner of the machinery brought a suit against him for its recove....

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....Appellant Tribunal, and on the petition of the department the above question was referred to us for our opinion. On behalf of the department Mr. Hardayal Hardy has drawn our attention to a number of cases, the first of which is Liquidators of Pursa Ltd. v. Commissioner of Income-tax [1954] 25 I.T.R. 265 (S.C.), which is a decision by the Supreme Court. This was a case of a sugar company. There, the company decided to stop its business and began to negotiate the sale of the machinery. The business was wound up and the machinery was sold. The purchaser took possession of it. Certain stocks of sugar were, however, left to the company and they continued to be sold. The sale proceeds of the sugar and the sale proceeds of the machinery were alle....