Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1963-64 - On death of 'R', a permanent director of assessee-company, his widow was granted pension for her lifetime in consideration of understanding and arrangement between assessee and 'R' - ITO disallowed assessee's claim on ground that neither 'R' was an employee nor was there any contract or scheme or practice of giving pension to directors or their legal representatives, and, thus, it could be regarded only as an ex gratia payment - Whether Tribunal having recorded a conclusion that there was no relationship of employer and employee between assessee and 'R', payment of pension to 'R's widow was not covered by scheme meant for employee - Held, yes - Whether assessee having not established factual existence of any understanding and arrangement with 'R', Tribunal was justified in treating said expenditure as an ex gratia payment and in disallowing deduction under section 37 - Held, yes Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1963-64 - 'V', a permanent director of assessee-company, on retirement, was paid gratuity amount, by amending articles of association in order to incorporate such payment to directors - Assessing Officer disallowed assessee's claim for deduction on ground that expenditure could only be considered as an ex gratia payment-Tribunal, however, allowed claim - Questions whether there was any existing liability incurred by company during relevant period and whether deduction claimed by assessee was in respect of any item of 'expenditure' incurred during relevant accounting period had not been considered by Tribunal - Whether admissibility of claim for deduction being conditional on incurring of expenditure during relevant accounting year, Tribunal ought not to have proceeded to allow said deduction without considering above questions - Held, yes - Whether, therefore, matter had to be referred back to Tribunal for purpose of submitting a fuller statement of case incorporating its findings on above points - Held, yes FACTS On the death of 'R' who was associated with the assessee-company…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492