Law:

Section:

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1984-85 - Assessee-company manufactured mopeds - In order to expand its business, it entered into negotiations with a Japanese motor cycle company which desired that assessee should first stop production of mopeds -Assessee was very much interested in getting latest technical know-how of manufacturing mopeds from Japanese company which insisted on equity participation and financial management - Assessee, however, did not go ahead with that expansion programme but it, subsequently, succeeded in getting technical know-how from that company on payment of lesser amount - Assessee incurred various expenses in that regard, viz., travelling, sales promotion and research and development expenses in respect of mopeds - It claimed deduction in respect of said expenses - Whether since expenses had been incurred in course of its business with a view to get latest technology/know-how of mopeds from Japanese company, expenses incurred had nexus with existing business of assessee and were allowable - Held, yes Krishan Mehta for the Appellant. Animesh Sharma for the Respondent. ORDER Adarsh Kumar Goel, J. - The Income-tax Appellate Tribunal, Chandigarh Bench has referred following question of law arising out of its order dated 18-9-1996 passed in ITA No. 1769/Chd./90 for assessment year 1984-85 for opinion of this Court:- "Whether, on the facts and in the circumstances of the case, the ITAT was right in law in deleting the addition of Rs. 4,40,183 out of travelling expenses, Rs. 1,10,804 out of salary and Rs. 53,543 out of research and development expenses claimed by the assessee pertaining to M/s. Honda Motor Cycles for which the assessee is a promoter and is separate identity under the head of Hero Honda Ltd. and came into existence afterwards." 2. The Assessing Officer made additions referred to in the question, which were upheld by the CIT(A). The Tribunal, however, held the expenses to be revenue expenses having nexus to the existing business of the assessee. The relevant finding of the Tribunal is as under:- "Ground Nos. 6, 7 and 8 are inter-related - confirmation of…

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