| Case ID |
391f9b4b-3c31-44a8-91f9-9ac9deaf0eb0 |
| Body |
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| Case Number |
IT REFERENCE No. 50 OF 1968 |
| Decision Date |
Nov 09, 1977 |
| Hearing Date |
|
| Decision |
The court held that the wealth-tax paid by the assessee is not an allowable deduction under section 10(1) of the Indian Income-tax Act, 1922, for the assessment year 1959-60 due to a retrospective amendment in the Income-tax (Amendment) Act, 1972. However, the professional fees related to the wealth-tax assessment were justified as a deductible expense based on the Supreme Court's precedent which recognized that wealth-tax paid on trading assets used for business purposes could be claimed as a business expense. The final decision was partly in favor of the assessee regarding the professional fees and against the assessee regarding the wealth-tax deduction. |
| Summary |
In the landmark case of Century Spg. & Mfg. Co. Ltd. v. Commissioner of Income Tax, the Bombay High Court addressed crucial aspects of business expense deductions under the Income-tax Act. The case revolved around the assessment year 1959-60, where the assessee claimed deductions for wealth-tax and related professional fees. The primary legal question was whether the wealth-tax paid was deductible as a business expense under section 10(1) of the Indian Income-tax Act, 1922. The court determined that due to a retrospective amendment in the Income-tax (Amendment) Act, 1972, the wealth-tax deduction was impermissible. However, the court reaffirmed that professional fees incurred for wealth-tax proceedings were allowable deductions as they were directly related to the trading company's business assets. This case highlights the importance of understanding the implications of legislative amendments on tax deductions and the judicial precedents that guide such determinations. The ruling serves as a significant reference point for future cases involving business expense deductions and the treatment of professional fees in tax assessments. |
| Court |
Bombay High Court
|
| Entities Involved |
Commissioner of Income Tax,
Century Spg. & Mfg. Co. Ltd.
|
| Judges |
Chandurkar, JJ.,
Desai, JJ.
|
| Lawyers |
Not available
|
| Petitioners |
Century Spg. & Mfg. Co. Ltd.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1979 SLD 797 = (1979) 116 ITR 301
|
| Other Citations |
Indian Aluminium Co. Ltd. v. CIT [1972] 84 ITR 735 (SC),
Travancore Titanium Products Ltd. v. CIT [1966] 60 ITR 277 (SC)
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
28(i),
10(1)
|