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TMI Blog1953 (4) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the Hoarding and Profiteering Ordinance, 1943 (Ordinance No. 35 of 1943), on a charge of selling goods at prices higher than were reasonable in contravention of the provisions of Section 6 thereof. It appears that before the prosecution was launched in August, 1944, respondent's business premises were searched and a part of his stock was seized and taken away. The respondent defended the case, spending a sum of Rs. 10,895, and the prosecution ended in an acquittal on 16th February, 1945. In his assessment to income-tax for the year 1945-46, the respondent claimed the deduction of the said sum of Rs. 10,895 from the profits of his business under Section 10(2)(xv) of the Act. The Income-tax Officer disallowed the claim but the Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s solely for the purpose of maintaining his name as a good businessman and also to save his stock from being under-sold if the Court held that the prices charged by the respondent were unreasonable." In the order made on the reference Harries, C.J., (with whom Banerjee, J., concurred) remarked :-- "In every criminal prosecution where the matter is defended to protect the good name of a business or a professional man, the fear of possible fine or imprisonment must always be there. But the Tribunal have pointed out that this was so inextricably mixed up with the protection of the good name of the business that it can well be found that the money spent in defence in the criminal prosecution was spent solely and exclusively for the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine or with both." The respondent was charged with contravention of Section 6, which by sub-section (1) prohibits the sale by a dealer or producer of an article for a consideration which is unreasonable and sub-section (2) defines "unreasonable consideration". The framers of the Ordinance thus appear to have regarded the offence as one calling for a deterrent punishment in view of its anti-social character, and it is idle to suggest that it is for the Income-tax authorities to prove in such cases that the conviction might result in a sentence of imprisonment and that, in the absence of such proof, there was, at the most, only a chance of conviction and fine. We cannot appreciate the remark that "even this chance of conviction and fine was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jadhiraj of Darbhanga, where the Privy Council held that law charges incurred in defending an action brought against a money-lender for damages for conspiracy, misrepresentation and breach of contract to advance sufficient funds to finance a company were allowable as business expenditure. In that class of case, no question could arise as to the primary or secondary purpose for which the legal expenses could be said to have been incurred as in the case of a criminal prosecution where the defence cannot easily be dissociated from the purposes of saving the accused person from a possible conviction and imposition of the prescribed penalty. Nor are we satisfied, as at present advised, that a distinction drawn in the Bombay case between the lega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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