Law: Income Tax Act, 1922

Section: 10,10(2)(xvi)

Income tax Act (XI of 1922)---S. 10(2) (xvi) Expression "expenditure ...laid out or expended wholly and exclusively for purpose of such business Connotation ¬ "Wholly" and "exclusively" Meaning Penalty paid by assessee though not of a personal nature, but was imposed on goods, which, were imported in connection with and for purpose of assessee's business Incurring of such expenditure being not necessitated by business of assessee but by his conduct in importing goods without licence, such expenditure could not, therefore, be treated as expenditure incurred `wholly' and "exclusively" for purpose of business ¬ Payments of penalty, held, could not come within purview of S. 10(2) (xvi). Commissioner of Income tax, Central, Karachi v. Messrs Alpha Insurance Co. Ltd. and another P L D 1981 S C 293; Raj Woollen Industries v. Commissioner of Income tax, Simla 43 I T R 36; Commissioner of Income tax, Gujrat v. Mihir Textiles Ltd. 104 I T R 167 and Haji Aziz and Abdul Shakoor Bros. v. Commissioner of Income tax, Bombay City 1141 I T R 350 ref. The Law and Practice of Income tax by Kanga and Palkhiwala 7th Edn. Vol. 1, p. 464; Commissioner of Income tax, Bombay v. Bannalal Marortamdas & Co. 67 1 T R 667; Govind Choudhury and Sons v. Commissioner of Income tax Bihar and Orissa '19 1 T R 493; Commissioner of Income tax, Gujrat v. S. C. Kothari 82 1 T R 794; Commissioner of Income tax, Bombay South v. Pranlal Kesurdas 49 1 T R 931; Commissioner of Income tax, Poona v. R. B. Rungta & Co. 50 1 T R 233; Commissioner of Income tax v. Sree Rajendra Mills Ltd. 93 I T R 122 and Indian Aluminium Co. Ltd. v. Commis¬sioner of Income tax, West Bengal I 79 I T R 514 distinguished. JUDGMENT MAMOON KAZI, J. The assessee is a private limited company which carries on business of manufacture and sale of tyres and tubes. The company imported certain nylon fabrics for which no licence had been obtained. When the goods arrived the same were confiscated for lack of such licence. However, in order to obtain delivery of such goods the assessee agreed to pay a penalty of Rs. 2,91,000. After realisation of the goods, the assessee succeeded in obtaining an import licence for the goods and…

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