Law:

Section:

I. Section 143 of the Income-tax Act, 1961 [Corresponding to section 23(1) of the Indian Income-tax Act, 1922] - Assessment - Additions to income - Assessment year 1944-45 - A house was purchased in name of wife of assessee - Half of consideration had been proved to be gift from her father-in-law - For other half, Tribunal disbelieved her statement that she had received gifts of cash and jewellery from her father and father-in-law on ceremonial occasions - It, therefore, held that it must have come from assessee and income therefrom, was assessable in his hands - Whether question whether a property belongs to assessee or to his wife will normally be a question of fact - Held, yes - Whether when house stood in name of wife, she should be presumed to be owner thereof and it was for persons, alleging that she was a mere benamidar, to prove this allegation either by direct evidence or by circumstantial evidence - Held, yes - Whether since no attempt was made to lead evidence to show that assessee had any funds outside account books from which he could have contributed towards house, Tribunal was not justified in holding that half of sale price must have been contributed by assessee - Held, yes II. Section 37, read with section 36(1)(ii) of the Income-tax Act, 1961 [Corresponding to section 10(2)(xv), read with section 10(2)(x) of the Indian Income-tax Act, 1922] - Business expenditure - Allowability of - Assessment year 1944-45 - Assessee paid to its employee fixed remuneration and commission at twenty five per cent of net profit - ITO made certain addition to net profits - Assessee claimed that from this extra amount added by ITO, 25 per cent which was payable to employee, should be deducted - Whether assessee could only claim deduction if it was actually paid by him - Held, yes - Whether so long as payment was not made, it could not be said that it was an allowable deduction under section 10(2)(x) or 10(2)(xv) of 1922 Act - Held, yes FACTS-I A house was purchased in the name of the wife of the assessee for Rs. 25,000. The Department treated this house to be the property of the assessee but he contended that the house belonged to his wife. In support of his…

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