The appellant, however, employed another firm, namely, J.K. Commercial Corporation as their new Managing Agents and executed an agreement in their favour on September 30, 1943.
The appellants case was negatived by the Income tax officer, the Appellate Assistant Commissioner and also by the Tribunal.
420 of 1963 11 L9255SupCI/75 K. Sen and M. M. Kshatriya, for the appellant.
The Tribunal also refused to make a reference to the High Court as in its opinion numberpoint of law arose.
1 ,00,000, Whether a sum of Rs.
1969 of the Allahabad High Court in Income Tax Ref No.
2,50,000 paid by the assesses to the outgoing meaning Agents was an admissible expenditure under s. 10 2 xv of the Income tax Act, 1922.
2,50,000 paid to the outgoing Managing Agents was a capital or a revenue expenditure incurred by the appellant.
Appeal by Special Leave from the Judgment and order dated the 26th September.
The stand taken by the assessee before the revenue was that as the expenses were incurred wholly and exclusively for the purpose of carrying on the business of the Company it would fall under s. 10 2 xv of the Income tax Act, 1922, which is the same as s. 37 1 of the Income tax Act, 1961, and therefore an allowable deduction under the aforesaid provision.
49,526/13,/6 to Rs.
The appellant then approached the High Court of Allahabad which directed the Tribunal to make a reference on the following four points and accordingly the Tribunal made a reference to the High Court on those points Whether there was any material on the basis ofwhichthe Appellate Tribunal companyld hold that the goodwill of Juggilal Karnlapat Cotton Manufacturers Ltd, was transferred to the J.K. Cotton Manufacturers Ltd, Whether there was any material on the record for a finding that the said transfer had been for a sum of Rs.
1.00,000 or for any other sum, and Whether there was any material on the record from which it companyld be held that the land had appreciated in value form Rs.
The action of the Company was approved by the Board of Directors.
2,50,000 to the outgoing Managing Agents by way of companypensation for terminating the agreement much earlier than stipulated under the original companytract.
250,000 paid by the assessed to the Managing Agents for the termination of their Manning Agency is an expenditure admissible under Section 10 2 xv of the Income Tax Act, When the matter was heard by the High Court, the assesses did number press any other point excepting point No.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The appellant entered into an agreement with the firm called Juggilal Kamlapat and employed the said firm as the Managing Agents of the Company.
The agreement was executed on August 8, 1941 and the Managing Agents were to work for the Company for a period of 20 years and were to charge companymission at the rate of 21.
2203 of 1970.
Under the release the appellant agreed to pay a sum of Rs.
About two years later the appellant decided to terminate the agreement executed in favour of Juggilal Kamlapat and the said Managing Agents readily accepted the offer made by the appellant as a result of which a deed of release was executed by the Managing Agents Juggilal Kamlapat on September 28, 1943.
B. Ahuja and S. P. Nayar, for the respondent.
The facts giving rise to the present appeal may be briefly summarised as follows The appellant assessee is a public limited companypany known as J.K. Cotton Manufacturers Ltd and the matter in dispute relates to the assessment year 1944 45.
The Judgment of the Court was delivered by FAZAL ALI, J. This is an appeal by special leave against the order of the High Court of Allahabad dated September 26, 1969 on a reference made to it by the Income tax Appellate Tribunal, Allahabad Bench.
