TMI Blog1974 (7) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 31, 1957. These claims for deduction relate to the assessment year 1958-59 for which the corresponding previous year is calendar year 1957. During the previous year a sum of Rs. 2,426 was incurred as expediture by the assessee-company in altering its memorandum and articles of association. Such alteration became necessary in view of compliance with the provisions of the Companies Act, 1956. A donation of Rs. 21,000 was made to the Bombay Provincial Congress Committee. The memorandum of association of the company authorised such donation or contribution to be made for political purposes. The third amount relates to the sum of Rs. 46,641 on account of wealth-tax liability for the year 1957. As the Tribunal partly accepted the contention u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven by one High Court pertaining to a question then such decision is normally followed by the other High Courts unless the High Court is clearly persuaded to take a view that the decision has been patently erroneous. So far as question No. 1 is concerned, it relates to a claim for deduction in respect of the sum of Rs. 2,426 expended for making alterations in the memorandum and articles of association of the company in order to bring its provisions in conformity with the Companies Act, 1956. Such a question arose for consideration before the Allahabad High Court in Commissioner of Income-tax v. Modi Spinning and Weaving Mills Co. Ltd. In this case a sum of Rs. 3,000 was paid to a lawyer for advising on amendments in the articles of assoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and claimed it as a business expenditure on the ground that, with the changing pattern of the economic structure of society, it was in the interest of the company to keep the ruling party in power. The Allahabad High Court took the view that as there was no direct nexus between the business of the company and the contribution, the amount of Rs. 56,000 paid to the Congress Parliamentary Board was not allowable as business expenditure. A similar view has been taken by the Calcutta High Court in Indian Steel Wire Products Ltd. v. Commissioner of Income-tax . In that case also the assessee had claimed deduction in respect of a sum of Rs. 1,50,000 paid to the Indian National Congress. The Calcutta High Court took the view that the contribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (Amendment) Act, 1972 (No. 41 of 1972), which received the assent of the President on August 28, 1972. By this amending Act it was provided that in section 40 of the Income-tax Act, 1961, after sub-clause (ii) of clause (a), the following sub-clause shall be, and shall be deemed always to have been, inserted, namely:--- " (iia) any sum paid on account of wealth-tax ". The provisions of sub-clause (iia) shall apply for the purpose of computing the income chargeable to tax under the head " Profits and gains of business or " profession ". So far as the position under the Indian Income-tax Act, 1922, was concerned, this specific provision was made in section 4 of the amending Act. Section 4 of the amending Act provides that : " Nothin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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