Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment years 1967-68 to 1969-70 - Assessee who exhibited films in three cinema houses was allowed deduction by Tribunal of legal expenses incurred and decretal amount paid in respect of one cinema house which was closed down and handed over to owner - Whether as Tribunal had not decided question whether three cinema houses constituted one single business or whether they were three independent businesses carried on by assessee, matter was to be remanded to Tribunal for fresh adjudication - Held, yes FACTS The assessee carried on the business of exhibiting cinema films in three cinema houses. One of the cinema houses was closed down and handed over to the owner who had filed a suit for recovery of damages for the period from 25-5-1960 to 4-10-1964. The assessee claimed deduction of the legal expenses incurred in defending the suit and the decretal amount paid to the owner in pursuance of the decree in said suit. The Tribunal allowed the assessee's claim. On reference: HELD The question to be decided by the Tribunal was whether the exhibition of films in the three cinema houses constituted one single business or whether there was three independent businesses carried on by the assessee. That had not at all been considered by the Tribunal. Therefore, the question of allowing the amounts in question as business expenditure would have to be gone into by the Tribunal after evaluating the facts in the light of the decision of the Supreme Court in CIT v. L.M. Chhabda & Sons [1967] 65 ITR 368. Note: The matter was remanded to Tribunal. CASE REFERRED TO L.M. Chhabda & Sons v. CIT [1967] 65 ITR 638 (SC) JUDGMENT This reference relates to the assessment years 1967-68, 1968-69 and 1969-70. The accounting period for these years ended respectively on 31st August, 1966, 31st August, 1967, and 31st August, 1968. The questions that arise for our decision are as follows: "1.Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing the claim of the assessee regarding the legal expenses amounting to Rs. 1,050 for A.Y. 1967-68, Rs. 4,599 for A.Y.…

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