| Case ID |
26196ca5-50d7-4b76-a1ef-058b346dc6e4 |
| Body |
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| Case Number |
MISC. CIVIL CASE No. 51 OF 1964 |
| Decision Date |
May 03, 1966 |
| Hearing Date |
|
| Decision |
The High Court ruled against the assessee, Central India Insurance Co. Ltd, stating that the provision for bad and doubtful debts of Rs. 25,000 claimed in the computation of income was not allowable because it was not included as an expenditure in the annual accounts. The Income-tax Officer had rightly rejected the claim, and this was upheld by the Appellate Assistant Commissioner and the Tribunal. The Court clarified that the provision made in the profit and loss appropriation account was not considered an expenditure for the purposes of tax computation, thus confirming the decisions of the lower authorities. |
| Summary |
This case involves the Central India Insurance Co. Ltd challenging the decision of the Income-tax Officer regarding the allowance of a provision for bad and doubtful debts. The main issue was whether the company could claim an expenditure that was not included in the profits disclosed by its annual accounts. The High Court held that since the Rs. 25,000 provision was not debited to the profit and loss account, it could not be allowed as an expense. This ruling emphasizes the importance of adhering to the prescribed accounting practices and the implications of the Income-tax Act, particularly sections regarding insurance business. The decision clarifies the conditions under which insurance companies can claim expenditures and sets a precedent for future cases involving similar claims. Keywords such as 'Income-tax Act', 'Insurance business', 'Provision for doubtful debts', and 'Tax computation' are relevant for understanding the broader implications of this case. |
| Court |
Madhya Pradesh High Court
|
| Entities Involved |
Commissioner of Income Tax,
Central India Insurance Co. Ltd
|
| Judges |
P.V. Dixit, C.J.,
K.L. Pandey, J
|
| Lawyers |
K.A. Chitaley for the Applicant,
M. Adhikari for the Respondent,
P.S. Khirwadker for the Respondent
|
| Petitioners |
Central India Insurance Co. Ltd
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1966 SLD 273 = (1966) 62 ITR 162
|
| Other Citations |
CIT v. Union Co-Operative Insurance society Ltd. [1963] 49 ITR 533 (Bom.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
44
|