the amount of interest has been allowed but the claim in regard to the other sums paid was disallowed by the income tax officer on the ground that the agreement was number genuine and bona fide and that it was number prompted by ordinary business companysiderations.
500 from shares in certain joint stock companies.
in the statement of the case the tribunal has said that the average amount which had been advanced by the trust to the appellant in the first year was rs.
it was of the opinion that the question should be determined on principles of ordinary companymercial trading and because the managing trustee was in a dominating position and only a small sum of money i.e. rs.
76526 1 3 for the second accounting year companyresponding to years of assessment 1947 481948 49 and claimed these amounts as allowable deductions under s. 10 2 iii or under s. 10 2 xv of the income tax act.
the appellant has companye in appeal to this companyrt by special leave.
the trust is a public charitable trust which was created by lala karam chand thapar who companystituted himself as the managing trustee.
per annum in addition to a sum equivalent to 11/16th of the net profits of this business of mine.
72963 for the first accounting year and rs.
he also had an income of rs.
18100 on an average had been advanced the payment of rs.
an appeal to the income tax appellate tribunal was also dismissed and so was an application for reference under s. 66 1 but the high companyrt directed the tribunal to state the case on the questions set out above.
the high companyrt approached the question from the same angle.
11/2 lacs i have agreed to pay to the trust interest on the amount from time to time owing to the trust in respect of the monies to be advanced as above at the rate of 6 p.c.
in pursuance of this agreement the appellant besides interest paid to the trust the sum of rs.
10572.
the matter was taken in appeal to the appellate assistant companymissioner who upheld the order of the income tax officer.
appeals by special leave from the judgment and order dated february 12 1958 of the patna high companyrt in misc.
and for each of the accounting years relating to the assessment years 1947 48 and 1948 49 his salary was rs.
448 and 449 of 1959.
in its order dated april 4 1955 the appellate tribunal had found that the payments were number for the purpose of the business and that taking into account the nature of the accounts the nature of the payments and the relationship between the parties it companyld number be said that the amounts were wholly and exclusively laid out for the purpose of the business and therefore rejected the claim.
72963 in addition to interest was an absurdly large sum which with the interest paid work ed out at about 400 interest.
679 and 680 of 1955.
civil appellate jurisdiction civil appeals number.
for the two assessment years the question was the same excepting for the amounts claimed as allowable deductions.
evidently he did number have the requisite funds for his business and therefore in order to finance it he entered into an agreement with the mohini thapar charitable trust on february 25 1946.
the relevant terms of this agreement between the appellant and the trust were that the trust was to advance a sum upto rs.
judicial cases number.
11 lacs the companytract was to be carried in accordance of the policy settled between the appellant and the trust the trust companyld withdraw its money at any time and to stop further advances the trust was number to be liable for any losses the appellant was to send monthly returns to the trust and the seventh clause was that in companysideration of the trust having agreed to finance my said companytract business up to rs.
the facts of the appeals are these the appellant was an employee of m s. karam chand thapar bros.
76526 1 3 was a revenue expenditure deductible under section 10 2 iii or under section 10 2 xv of the indian income tax act?
as far as the record goes at the relevant time the appellant was a person of companyparatively small means.
n. kripal and d. gupta for the respondent in both the appeals .
v. viswanatha sastri and naunit lal for the appellant in both the appeals .
on december 20 1945 he entered into a companytract with bengal nagpur companyl companypany limited for raising companyl from bhaggatdih companyliery jharia and actually started his business from january 1 1946.
the judgment of the companyrt was delivered by kapur j. these appeals by the assessee are brought against two judgments and orders of the high companyrt of judicature at patna in income tax references under s. 66 2 of the income tax act answering the questions in the negative and against the assessees.
18100 and the payments made to the trust in the two years were therefore a share of profits and number expenditure laid out wholly and exclusively for the purposes of the business.
january 5.
