Law: Income Tax Act, 1922

Section: 66(2),10(2)(xvi),10(2)(iii),66(1),10(2)( xv)

Law: Land Acquisition Act, 1894

Section: 34

Income-tax Act, 1922 -- Sections 10(2)(xvi), 66(2) -- Reference to High Court Question of law -- Question of allowance of interest as revenue expenditure -- Question raised before the Appellate Tribunal -- Whether a question of law arising out of Tribunal's order -- Held yes -- High Court -- Whether empowered to reframe the question proposed -- Held yes -- Business expenditure -- Purchase of mill -- interest paid on unpaid purchase price in terms of the sale agreement -- Payment of interest whether separate from the principal amount due -- Held yes -- Whether allowable as expenditure -- laid out or expended wholly and exclusively for the purpose of business -- Held yes -- JUDGMENT The judgment of the Court was delivered by I. MAHMUD, J. --- These four applications, namely, I.T.C. Nos. 5/69, 6/69, 7/69 and 8/69 relate to the charge years 1956-57, 1957-58, 1958-61, respectively, They have been filed by the applicant assessee under section 66(2) of the Income-tax Act, 1922(hereinafter referred to as "the Act") praying the High Court to require the income-tax Appellate Tribunal to state certain common questions of law said to arise out of the consolidated order of the Tribunal dated 24.11.1964 relating to the said four charge years which the said Tribunal refused to refer on the ground that they raised questions of fact. These applications were made by the assessee under the law as it then stood but it is conceded that after the amendment of Section 66(2) of the said Act the High Court, if it is not satisfied with the correctness of the decision may frame the questions of law and proceed to hear the case. 2. The mills knows as the Khairpur, Textile Mills situate at Khairpur, were owned by the Khairpur State. The applicant, Khairpur Textile Mills Ltd., was incorporated in the State of Khairpur as a joint stock Company under the Companies Act. 1913, with the object, inter alia, of purchasing the said Mills from the Government of Khairpur. Accordingly, pursuant to Deed of Sale dated 3.3.1955, the applicant purchased the said Mills comprising the freehold and leasehold immovable properties, plant, machinery, furniture, stock-in-trade, book debts and other…

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