TMI Blog1974 (11) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... arch 31, 1962, the company returned an income of Rs. 12,16,625 and in arriving at this income it claimed the above sum of Rs. 13,820 as loss incidental to its business. It was contended before the Inspecting Assistant Commissioner, who did the assessment in this case, that the assessee was forced to purchase these bonds by the Regional Transport Authorities, that the assessee had borrowed large sums of money for the purpose of its business at very high rates of interest and that in order to make the money available for its business the assessee had to sell the bonds very soon after its purchase at a loss. The Inspecting Assistant Commissioner rejected this claim on the ground that no evidence had been produced to show that the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , had borrowed considerable amounts for its business at much higher rate of interest than that which the assessee would get under the bonds. It was also necessary for the assessee to mobilise all its available resources in order to carry on its business and, therefore, it had to sell the bonds at a short time after the purchase. These facts, according to the Tribunal, proved that, though the purchase and sale of bonds was not part of the business of the assessee, the expenditure was incurred by the assessee only for the purpose of its business. In this view, the Tribunal held that the assessee was entitled to claim this loss in computing its assessable income and there was no justification for disallowing the same. Accordingly, it directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a view to make profits on investment. It should also be borne in mind that the jurisdiction of the revenue in this regard is confined to deciding the reality of the expenditure and whether it was wholly or exclusively for the purpose of the business and it is not for the revenue to question the commercial expediency of the expenditure. Commercial expediency is a matter entirely left to the judgment of the assessee--vide Amarjothi Pictures v. Commissioner of Income-tax. The learned counsel for the assessee in this connection relied on the decision in Ambala Bus Syndicate Private Ltd. v. Commissioner of Income-tax. In that case also the assessee was a transport company whose road permits were to expire on June 30, 1969. There was a threat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase could not be considered as an expenditure strictly for the purpose of its business, though the expenditure might have been incurred in the course of carrying on the business of the assessee. The Supreme Court in Indian Molasses Co. (P.) Ltd. v. Commissioner of Income-tax considered the meaning of the word " expenditure " in section 10(2)(xv) of the Indian Income-tax Act, 1922. It was held therein that in the context in which that word was used in the clause, it means money laid out by calculation and intention. It is what is paid out or away and something which is gone irretrievably. It is in this sense we are also concerned in the present case. It is true that in Ambala Bus Syndicate Private Ltd. v. Commissioner of Income-tax t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thereby to gain benefits in the business as a transport operator. Now, the question referred to us consists of two parts. The first part relates to the allowability of the difference between the outlay on Government bonds and their sale value as an expenditure. The second part refers to the allowability of the same as a business loss. As already stated, the learned counsel for the assessee at the time of arguments before us did not want to claim the difference as a business loss. The question will, therefore, have to be reframed and, accordingly, we reframe the question as follows : " Whether, on the facts and in the circumstances of the case, the sum of Rs. 13,820 representing the difference between the assessee's outlay on Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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