In companying to the aforesaid companyclusion the Appellate Authority relied upon the decision of the Calcutta High Court in the case of Mannalal Ratanlal Vs.
The Income Tax Officer dis allowed the aforesaid deduction claimed by the assessee as he was of the opinion that the payment of income tax cannot be held to be the payment for the purpose assessee preferred an appeal and the Appellate Authority agreeing with the assessing officer came to hold that the over draft utilised for payment of tax cannot he said to be for the business purposes of the companypany.
28,488/ on money borrowed for payment of income tax was number an expenditure laid out wholly and exclusively for the purpose of business as companytemplated by sub section 1 of Section 37 of the Income tax Act, 1961?
The assessee is a companypany having an over draft account with a Bank.
404/75.
During the assessment year 1972 73 the assessee claimed a sum of rupees 28.488/ as an allowable expenditure under Section 37 1 of the Act, the said amount representing the interest which the assessee had to pay on the over draft amount, the said over draft having been made for the payment of income tax.
Commissioner of Income Tax, 58 I.T.R. 182.
The assessee the carried the matter in second appeal before the Tribunal.
On an application being filed before the Income Tax Appellate Tribunal Section 256 1 of the Act the Tribunal referred the following question for being answered by the High Court Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the payment of interest of Rs.
PATTANAIK, J. This appeal by grant of certificate under Section 261 of the Income Tax Act, 1961 hereinafter referred to as the Act by the High Court of Calcutta is directed against the judgment and order of the Calcutta High Court dated 21.4.1978 in Tax Reference No.
