TMI Blog1989 (5) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... e been referred to this court for the assessment year 1972-73 : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that section 52(2) of the Income tax Act, 1961, had no application and could not be invoked? (2) Whether, on the facts and in the circumstances of the case, the Tribunal misdirected itself in holding that the approval of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered is the third question. The facts relating to the third question are that the Income-tax Officer disallowed certain expenses claimed by the assessee while computing the income from other sources. Total expenses claimed by the assessee amounted to Rs. 22,384. Out of the above, the Income-tax Officer allowed Rs. 3,145 (a portion of salary) under the head " Property " and another sum of Rs. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal, it was contended that all the above expenses had to be incurred by the assessee either on statutory necessity or on commercial expediency. The assessee relied on the various orders passed by the Tribunal from time to time where similar expenses incurred by the assessee had been allowed as deduction under "other sources". The Tribunal was of the view that the assessee being a company h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nses, travelling expenses, etc. The Allahabad High Court held that such expenses are allowable for the purpose of keeping the business of the assessee-company alive and for retaining the status of the assessee-company. In our view, a limited company, even if it does not carry on business but it derives income from " other sources " has to maintain its establishment for complying with statutory o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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