Law: Income Tax Act, 1922

Section: 10,10(2)(xvi)

Income-tax Act (XI of 1922)---S.10(2)(xvi)--Payment made to other dealers to avoid unhealthy 2ompetition--Admissible deduction under S 10(2)(xvi)--Assessee making certain payment to association of dealers as a consideration under an agreement to avoid unhealthy competition--Income-tax Officer disallowing this expenditure--Any payment made to any person in competition with assessee under an agreement to avoid any unfair competition, held, would be admissible deduction under S.10(2)(xvi). Commissioner of Income-tax, Karachi v. Moosa Omar & Co. Ltd. (1980) 41 Taxation 19 Pondichery Railway Co. Ltd. v . Commissioner of Income-tax A I R 1931 P C 165; Commissioner of Income-tax-y. C. MacDonald & Co. (1935) 3 I T R 459; Indian Radio & Cable Communications Co. Ltd. v. Commissioner of Income-tax (1937) 5 f T R 270; Onion Cold 'Storage Co. Ltd. v. Adamson (1931) 16 T C 293; Guest, Keen and Netherlands Ltd. v. Fowler (Surveyor of Taxes) 5 TC 511; Gramhamston Iron Co. v. Crowford ('Surveyor of Taxes) 7 T C 25; Commissioner of Income-tax v. Sarbianga Sugar Co. Ltd. (1957) 321 TR64; E.D. Sassoon & Co. Ltd. v. Commissioner of Income-tax (1954) 26 1 T R 27 and Union Cold Storage Co. Ltd. v. Adamson (1931) 16 T C 293 p. 321 ref. Guest, Keen and Nettlefolds Ltd. v. Fowler (Surveyor of Taxes) 5 T C 511. at 517; Grahamston [ron Company, v. Crawford (Surveyor of Tax) 7 T C 25 and Commissioner of Income-tax, Bihar and Orissa v. Sarbianga Sugar Co. Ltd (1957) 32 I T R 64 rel. JUDGMENT NAIMUDDIN, J.-- By this reference under section 66(1) of the Income-tax Act, 1922 made by the Commissioner of Income-tax (Central) Karachi, he has raised the following question of law for answer by this Court The question reads as follows:- Whether on the facts and in t e circumstances of the case the payment of Rs.1,20,951 in the assessment year 1964-65 was admissible deduction within the meaning of section 10(2)(xvi) of the Income-tax Act? 2. The facts giving rise to the above question may be briefly stated are as follows:- 3. The respondent is a private Limited Company carrying on business in Kerosene Oil, Petrol and Lubricants. In Kerosene 011 account for the assessment year 1964-65…

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