TMI Blog2001 (4) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... parately filed for each assessment year. However, as the questions involved in all these cases were identical, except that the amount in respect of which deduction was claimed and disallowed is different in each case, on the same set of facts they were consolidated and registered as one 1. T. Reference No. 2 of 1980. Instead of repeating the questions of facts of each case separately, we shall confine the reference to the statement of case in respect of the assessment year 1964-65. This reference has been submitted at the instance of the assessee, who was unsuccessful in his claim for deduction in respect of different amounts paid during the previous years relevant to each assessment year to one Lehini Bai, widow of Binnumal. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed only in the year in which the liability arose. Aggrieved by the Tribunal's order dated July 31, 1975, the assessee has moved the applications under section 256(1) of the Income-tax Act, 1961, which were allowed and the following questions of law have been referred to this court for its opinion arising Gut of the Tribunal's appellate order : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amount of Rs. 10,000 paid to the widow of the late Shri Binnumal in respect of the assessment year 1964-65 was not incurred wholly and exclusively for the purpose of the business ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was disputed by him. A perusal of the order as well as material relating to the subject of the existing dispute between the assessee and Smt. Lehini Bai, widow of Binnumal, justifies the contention raised by learned counsel for the Revenue. The Tribunal has referred to the terms of the agreement between the assessee and the said Lehini Bai for referring their dispute to an arbitrator, the award passed thereon, and the decree of the court by which the award was made rule of the court and reached a finding that there is no material that may even suggest that the sums in question were the expenses incurred wholly and exclusively for the purpose of carrying on business. The said Binnumal, was an employee of Vakil and Co., the name i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow is the amount to be paid, if any, and to whom and on what conditions, and (d) miscellaneous matters such as pending suits, kiosks, etc." From a perusal of the aforesaid terms of reference, it is clear that the dispute related to the outstanding money and not to the retention of the books of account by Smt. Lehini. No existence of such dispute finds a mention. It was found by the arbitrator that the money due from the assessee to the late Binnumal was on account of money advanced to the assessee. No part of the award refers to payments on account of the litigation expenses incurred or a settlement arrived at between the parties settling all the disputes without determination on the merits. Such repayment of debt obviously could no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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