Law: Income Tax Act, 1961

Section: 28

(a) Income-tax----Business expenditure---Premises taken on rent---Agreement for payment of advance to be adjusted against rent---Finding by Tribunal that premises had been used for business purposes---Rent paid was deductible---Indian Income Tax tact, 1961. The assessee, an investment company, had taken certain premises on rent. Under the terms of the agreement, the assessee had paid an advance which was to be adjusted against the rent of Rs.36,000 per annum. The Income-tax Officer rejected the claim for deduction of the rent. The Commissioner of Income-tax (Appeals) and the Tribunal found that the premises had been taken on rent for purposes of business. They allowed the deduction. On a reference: Held, that the amount of rent was deductible. (b) Income-tax--- ----Business loss---Loss on purchase and sale of shares---Transactions effected through registered share brokers---Quotation of price tallying with records of stock exchange---Loss was deductible---Indian Income Tax Act, 1961, S.28. The assessee claimed a loss of Rs.49,210 in share dealings. This was disallowed by the Income-tax Officer. The Tribunal found that the transactions were made through registered share brokers. The rates quoted for the said shares were found to be correct as per the record of the stock exchange: The Tribunal accepted the claim of the assessee. On a reference: Held, that the Tribunal had found on the basis of the materials on record that the assessee had suffered the loss in share dealings to the tune of Rs.49,210. The loss was deductible. McDowell & Co. Ltd. v. CTO (1985) 154 ITR 148; (1985) 59 STC 277 (SC) ref. THIS JUDGMENT DELIVERED BY: YAD RAM MEENA, J. ---In this reference application, the Tribunal was directed to refer the following questions for the opinion of this Court: "(1) Whether, the finding of the Tribunal relating to the allowance of deduction of business expenditure of Rs.36,000 as and by way of payment of alleged rent is based on any relevant evidence or otherwise perverse? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing the share loss of Rs.49,210 in the purchase and sale of share?" The assessee…

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