Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Year in which allowable - Whether liability under the Employees' State Insurance Act, which is disputed in appeal, would become real and enforceable after decision of High Court upholding such liability and will be allowable then even though it related to earlier years - Held, yes Facts Under the Employees' State Insurance Act, 1948, as originally promulgated, only the employees who worked in the factory of an employer came under the purview of the said Act. By the Amending Act No. 44 of 1966, the definition of an 'employee' under section 2(9) of the Employees' State Insurance Act was substituted and other categories of employees were brought within the purview of the Act. The employers did not accept the extended definition of 'employee' in the substituted section and challenged the validity of the amending legislation in different High Courts. Subsequently, the Calcutta and Delhi High Courts rejected the contentions of the employers and held that all categories of employees mentioned in the substituted section 2(9) would be employees within the meaning of the said Act. The Madras High Court and the Employees' Insurance Court, Bombay, took a different view. The assessee came within the mischief of the substituted section 2(9) and became liable to contribute for such insurance to the Employees' State Insurance Corpn. on and from 28-1-1968. The assessee, however, did not make any contribution as required under the substituted section nor did it initiate any proceedings challenging the substituted section 2(9) in any Court. After the decisions of several High Courts on the controversy as aforesaid, the Employees' State Insurance authorities issued a letter to the assessee dated 9-1-1974, informing the latter of the decisions of the Courts. The assessee initially objected to the demand for payment of contribution under the substituted section but after a further demand from the authorities dated 20-2-1974, agreed to pay the contribution as demanded. The assessee was assessed to income-tax for the assessment year 1975-76, the corresponding accounting year ending on 30-6-1974. In its return, the…

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