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TMI Blog1931 (12) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... , a limited company registered under the Indian Companies Act, carrying on business in the manufacture and sale of the "Minsararasam," a patent medicine, claimed a deduction from their income in the year of account of a sum of ₹ 13,000 odd as a lawfully deductible item. They claimed to deduct that sum under Section 10(2)(ix) of the Indian Income Tax Act as being expenditure incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 030 in five yearly instalments at not less than ₹ 16,000 a year with effect from 1st April, 1923, and (2) that after the expiry of five years a royalty of annas eight on every bottle of Minsararasam sold be paid to the party on the second part as long as the said Minsararasam Company, Ltd., is in existence. 2. With regard to the former clause, it is stated that the ₹ 81,000 have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business which in the year of account amounted to ₹ 28,000. The question referred to us depends entirely upon how the agreement before mentioned is construed. It is the petitioners' contention that Clause (2) does not relate to the consideration for the purchase of the rights and privileges of manufacturing, selling and generally dealing in the medicine but that the purchase price is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the agreement it could not be known what quantity of medicine would be sold and what amount would be realised by that sale. But as soon as the company started selling the medicine what was indefinite at the time of the agreement became definite and ascertainable at any time and the accounts of the company would show the amount due to the Doctor under Clause (2) of the agreement. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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