Law:

Section:

I. Section 41(1), read with section 10(3) of the Income-tax Act, 1961 - Remission or cessation of trading liability - Assessment years 1966-67 and 1967-68 - Government sanctioned 20 per cent concession on existing power tariff rates to selected industries in pursuance of well defined policy - Screening Committee appointed for that purpose approved assessee for said concession - Accordingly, assessee received refund out of electricity charges already paid - Whether since if assessee was not carrying on business it would not have been eligible for said concession, subsidy received could not be called a windfall or a casual receipt unconnected with business carried on by assessee - Held, yes - Whether even otherwise if a casual receipt arises from business it could be included in total income of assessee - Held, yes - Whether since said amount was paid to assessee towards expenditure incurred by him in regard to electricity charges, it should be deemed to be profits and gains of business and, hence, taxable in hands of assessee - Held, yes II. Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1966-67 - There was an unmanned railway level crossing near assessee's factory - An overbridge at that crossing was considered a necessity by both railways and assessee regard to location of factory, residential colony and assessee's aided school - At instance of railway authorities assessee deposited certain amount with those authorities for construction of overbridge - Whether such amenity was essential to earn goodwill of worker and, hence, was incurred wholly and exclusively for purpose of business - Held, yes - Whether therefore, said expenditure was allowable as business expenditure - Held, yes III. Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of - Assessment years 1966-67 - Whether roads could be constituted as building so as to be entitled for depreciation - Held, yes FACTS I Pursuant to many representations, the assessee was informed that the State Government had issued orders sanctioning 20 per cent concession on the existing power tariff rates to the assessee-company. In accordance with…

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