R. Dalmia Vs. C.I.T., Delhi, New Delhi
[1977] INSC 179 (21 September 1977)
FAZALALI, SYED MURTAZA FAZALALI, SYED MURTAZA
BHAGWATI, P.N.
CITATION: 1977 AIR 2394 1978 SCR (1) 537 1977
SCC (4) 329
ACT:
Income Tax Act 1922, s. 12(2)-Assessee
borrowed money from a bank and bought shares-Agreement provided that dividend
etc., on shares declared after a certain date shall be held by the bank for the
benefit of the assessee Shares not taken delivery of by the assessee by the
stipulated date-Dividend declared, it accrued to the assessee.
Section 12(2), scope of-Interest paid on loan
and damages paid-If permissible deduction.
HEADNOTE:
The assessee borrowed a large sum of money
from a bank and purchased shares from it; but did not take delivery of the
transfer forms and share certificates by making payment of the purchase price.
Clause (3) of the agreement, however, stipulated that if the shares were not
taken delivery of by a certain date, dividends, rights, bonuses etc. which
might be declared after that date would be held by the bank for the benefit of
the assessee; and that the assessee would be liable to pay interest on the
purchase price. Clause (4) provided that if the assessee did not take delivery
of the shares by a certain date, the bank would be at liberty to sell the
undelivered shares and to hold the assessee liable for the difference in the.
price fetched by the shares.
The assessee paid to the bank over two lacs
of rupees by way of interest and more than a lac of rupees by way of damages
for failure to take delivery of the shares. A sum of Rs. 95,000 odd was earned
as dividend by the assessee on the shares.
The Income Tax Officer disallowed the claim
of the assessee for deduction Linder s. 12(2) of the Indian Income Tax Act 1922
of the interest on the loan and damages paid by him to the bank but included
the dividend earned on the shares in his total income. On appeal the Appellate
Assistant Commissioner affirmed the view of the Income Tax Officer.
The Tribunal, on the other hand, held that
since there was no transfer of equitable title in the shares to the assesee he
was not entitled to any deduction of interest; disallowed the deduction of
damages paid by the assessee but excluded the dividend from his total income on
the ground that it was not dividend earned by him. On reference, the High Court
affirmed the findings of the Tribunal.
Allowing the appeal in part,
HELD : (1) The High Court and the Tribunal
were wrong in taking the view that the Income Tax Officer rightly disallowed
the interest claimed by the assessee. This amount was a permissible deduction
under s.12(2) of the Act and should have been allowed. There is a direct nexus
between the amount paid by the assessee as interest and the earning of the
dividend income. [546 A-B] (2) In the Bank of India v. J. A. H. Chinoy A.I.R.
1950 P.C. 90 at 97, the Privy Council held that even though a transaction may
not amount to an acquisition of equitable interest, yet as between the vendor
and the purchaser a term regarding payment of the declared dividend would be
fully effective because once the dividends are declared, they will be deemed to
have accrued to the purchaser even though there may not have been any transfer
of equitable title to the purchaser. Clause (3) of the agreement read in the light
of this decision shows that even if there was no transfer of equitable title to
the assessee, since the dividend declared would be an additional source of
income to him, the assessee would be entitled to deduct the interest paid on
the loan for acquiring the shares. [541 E & H] 538 (3) An analysis of
s.12(2) of the Indian Income Tax Act 1922 shows that before this provision
could apply, the following conditions must be fulfilled; (i) the expenditure
must have been incurred solely and exclusively for the purpose of earning
income or making profit; (ii) the expenditure should not be is the nature of a
capital expenditure; (iii) the amount in question should not be in the nature
of personal expenses of the assessee; (iv) the expenditure should be incurred in
the accounting year; and (v there must be a clear nexus between the expenditure
incurred and the income sought to be earned. [542 E-G] In the instant case (i)
a genuine and bona fide contract had been entered into between the assessee and
the bank for transfer of a large number of shares to the assessee; (ii) the
assessee, in pursuance of this agreement raised the loan from the bank and paid
interest for this purpose; and (iii) under cl.(3) of the agreement the
dividends, rights and bonuses etc., were held by the bank for the benefit of
the assessee after they were declared.
Eastern Investments Ltd. v. Commissioner of
Income Tax, West Bengal 20 I.T.R. 1 and Bombay Steam Navigation Co. (1963)
Private Ltd. v. Commissioner of Income-tax, Bombay 56 I.T.R. 52, 59, followed.
J. K. Commercial Corporation Ltd. v.
Commissioner of Income-tax, U.P. 72. I.T.R. 296 and Commissioner of Income-tax,
Bombay City I v. H. M. Maharani Vijaykuverba Saheb of Morvi 100 I.T.R. 67,
approved.
Ormerods (India) Private Ltd. v. Commissioner
of Income-tax, Bombay City 36 I.T.R. 329 and Smt. Nirmala M. Doshi v. Commissioner
of Income-tax, Bombay City 11 82 I.T.R. 648, referred to.
(4) Since the assessee's main business was
not dealing in shares, damages were paid by him due to his own default.
The damages paid would, therefore, be capital
expenditure.
[546 C] (5) The dividend earned by the
assessee should be included in his total income. [546 F]
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 1519 of 1971.
Appeal by Special Leave from the Judgment and
Order dated 22-1-1971 of the Delhi High Court in 1. T. Reference No. 25 of
1966.
Bishamber Lal for the Appellant.
V. P. Raman, Addl. Sol. Genl. and J.
Ramamurthi for the Respondent.
The Judgment of the Court was delivered by
FAZAL ALI, J. In this appeal by special leave, the assessee who is an
individual had purchased a large number of shares from the Bharat Bank Ltd. for
Rs. 44,14,990/by borrowing this amount from the, Bharat Bank and he paid
interest of Rs. 2,04,744/on the said amount. In fact four years back i.e. in
1944-45 the joint family of which the assesses was a member had sold these very
shares along with other shares to the Bharat Bank Ltd. The agreement by which
the assessee purchased these shares is dated February 5, 1948 and is to be
found at Annexure A on p. 19 of the Paper Book. In spite of the fact that the
assessee had agreed to buy the shares from the Bharat Bank Ltd. he did not take
delivery of the transfer forms and the share certificates by making payment of
the purchase price. Under the agree539 ment dated February 5, 1948 it was
agreed that the shares would be taken delivery of on or before March 31, 1948.
It was further agreed that if the shares were not taken delivery of by this
date, the dividends, rights, bonuses etc. which may be declared after that
date, namely, March 31, 1948 will be held by the Bank for the benefit of the
assessee and the assessee would be liable to pay interest at the rate of 6%
p.a. on the purchase price from April 1, 1948 till actual delivery of the
shares' Clause (4) of the agreement provided that if for any reason the shares
were not taken delivery of by March 31, 1951, the Bank will be at liberty to
sell the then undelivered shares and to hold the assessee liable for the difference
in the price fetched by the shares. The assessee did not take delivery of some
of the shares until March 31, 1951 and paid a sum of Rs.
1,05,000/as damages for his failure to take
delivery as stipulated in the agreement between the parties. It is also the
admitted case of the parties that the assessee earned a dividend income of Rs.
95,664/-. The assessment year in the instant case is 1953-54 i.e. the previous
year ending September 30, 1952. The assessee claimed that he was entitled to
deduct the interest paid for acquiring the shares worth Rs. 44,14,990/and,
therefore, a sum of Rs., 2,04,744/was deductible under s. 12(2) of the
Income-tax Act, 1922-hereinafter referred to as 'the Act'. It was further
alleged by the assessee that even the damages amounting to Rs. 1,05,000/which
he had paid to the Bharat Bank for not taking delivery of the shares were also
deductible because this was a business expenditure.
Finally, the assessee also claimed that the
sum of Rs.
95,664/ being the dividend income was not to
be included in the total income of the assessee. The Income-tax Officer
rejected all the pleas taken by the assessee and disallowed the deductions
claimed by the assessee as mentioned above.
The Income-tax Officer also included the sum
of Rs. 95,664/in the total income of the assessee.
The assessee filed an appeal before the
Appellate Assistant Commissioner who affirmed the order of the Income-tax
Officer, though on slightly different grounds with which we are not concerned
here. Thereafter the assessee filed an appeal before the Tribunal which gave a
finding that under the facts and circumstances of the present case there was no
transfer of equitable title in the shares to the assessee and, therefore, he
was not entitled to any deduction of the interest paid by him on the capital
amount which constituted the purchase money of the shares. The Tribunal further
held that the interest paid was of a capital nature and did not fall within the
ambit of s. 12(2) of the Act. As regards the assessee's claim to the dividend
income of Rs. 95,664/-, the Tribunal held that as the said income had been
credited to the account of the assessee in terms of cl. (3) of the agreement
dated February 5, 1948 it bad not been actually earned by the assessee and the receipt
of the dividend by the Bank was only taken into account for finalisation of the
price. The Tribunal accordingly directed deletion of this amount from the total
income of the assessee. As regards the third point, namely, the sum of Rs.
1,05,000/which the assessee paid as damages to the Bank, the Tribunal held that
as the assessee was not doing business exclusively in shares he was not
entitled to set off the interest paid by him as revenue loss.
540 Thereafter the appellant moved the
Tribunal for making a reference to the High Court and after hearing counsel for
the parties the Tribunal referred the following questions for the opinion of
the High Court "(1) Whether on the facts and in the circumstances of case
the tribunal rightly rejected the assessee's claim for deduction of, the
interest payment of Rs. 2,04,744/? (2) Whether on the facts and in the
circumstances of the case the tribunal rightly held that the revenue was not
estopped from disallowing the claim for the deduction of the interest amount in
view of the allowance of such claim in the past ? (3) Whether on the facts and
in the circumstances of the case the tribunal rightly disallowed the loss of
Rs. 1,05,000/in respect of 7500 preference shares of the Dalmia Investment
Company Ltd. ? (4) Whether on the facts and in the circumstances of the case
the tribunal rightly held that the dividend amount of Rs: 95,664/did not
constitute the income of the assessee ?" Out of these questions, Question
No. (2) has not been pressed by the appellant because it is well settled that
there is no question of estoppel or res judicata in relation to the assessment
of different years. Thus the only questions that were to be determined by the
High Court were Questions Nos. (1), (3) and (4). The High Court agreed with the
Tribunal that in the facts and circumstances of the case there was no transfer
of equitable title of the shares to the assessee and, therefore, he was not
entitled to claim deduction of Rs. 2,04,744/-. The finding of the Tribunal on
Question No. (3) was also upheld and the High Court agreed that the loss of Rs.
1,05,000/was rightly disallowed. On Question No. (4) the High Court, also
agreed with the view of the Tribunal and held that this amount could not be
included in the total income of the assessee. The assessee has come up to this
Court,, after obtaining special leave from this Court.
Both the Tribunal and the High Court have
gone into the question of transfer of equitable title at very great length, but
in the facts and circumstances of this case after hearing the parties and going
through the record we feel that the question of transfer of equitable title is
a vexed question of law and is not free from difficulty.
Having regard to the peculiar facts of this
case, it is not necessary for the Court to decide the question of equitable
transfer in order to give relief to the appellant on Question No. (1). In other
words, we are of the opinion that the question as to whether or not the
appellant is entitled to a deduction of Rs. 2,04,744/can be decided without
touching or affecting the question of transfer of equitable title to the
assessee. This can be done by examining the scope and ambit of S. 12(2) of the
Act in order to find out if the assessee's case for payment of interest can
come within the four corners of that section.
In these circumstances we do not propose to
go into the question of transfer of equitable title which had occupied a
greater part of the judgments of the High Court and 541 the Tribunal. We would,
however, like to make it clear that we should not be taken to have affirmed the
decision of the High Court on this point, but we refrain from expressing any
opinion thereon in the view that we take in the present case.
In Bank of India v. J.A.H. Chinoy (1), Lord
Mac Dermott pointing out the extent of the doctrine of transfer of equitable
title to a purchaser observed as follows :
" Their Lordships do not desire to cast
doubt on the proposition that in India a purchaser of shares (which under the
Indian Sale of Goods Act come within the definition of " goods") does
not acquire an equitable interest by virtue of the contract of sale. But they
cannot agree with the application of this proposition which commended itself to
the Appellate Court. No doubt as between a company and a purchaser of shares
therein the date of completion is all important. But as between vendor and
purchaser, where the contract does not otherwise provide, the term to be
implied as to dividends is not confined to dividends still to be declared in
respect of a period or periods prior to the contract. It includes such
dividends but that is not because the period in which they were earned is
crucial; what is crucial is the date or dates of declaration." It would
appear from the observations of the Privy Council that even though the
transaction may not amount to acquisition of equitable interest, yet between
the vendor and the purchaser the term regarding payment of the declared
dividend would be fully effective because once the dividends are declared they
will be deemed to have accrued to the purchaser even though there may not have
been any transfer of equitable title to the purchaser. In the instant case, cl.
(3) of the agreement by which the assessee purported to acquire shares from the
Bank runs thus :
"That if the shares are not taken
delivery of by 31-3-48 the dividends, rights, bonuses, etc., that may be
declared after that date, will be for your benefit, but you will be liable to
pay interest at 6% from 1-4-1948 till the date of actual delivery on the price
of the shares calculated at the rates above mentioned." A perusal of the
statement made in this paragraph manifestly reveals that even if the shares are
not taken delivery of by the assessee, the dividends, rights, bonuses etc.
which may be declared after that date were to be held by the Bank for the
benefit of the purchaser. Thus the principle which is deducible from the
decision of the Privy Council in J.A.H.
Chinoy's case (supra) fully applies to the
facts of the present case. It follows, as a logical corollary, therefore, that
even if there was no transfer of equitable title to the assessee, since a
Company declared the dividend etc. which would be an additional source (1)
A.I.R.1950P.C90., 97.
542 of income to the assessee, would he not
be entitled to, deduct a sum of Rs. 2,04,744/being the interest paid on the
loan for acquiring the shares ? The position will become clear if we extract s.
12(2) of the Act as it stood at the relevant time "(2) Such income,
profits and gains shall be computed after making allowance for any expenditure
incurred solely for-the purpose of making or earning such income, profits or
gains provided that no allowance shall be made on account of-(a) any personal
expenses of the assessees, or (b) any interest chargeable under this Act which
is payable without the taxable territories, not being interest on a loan issued
for public subscription before the 1st day of April, 1938, or not being
interest on which tax has been paid or from which tax has been deducted under
section 18, or (c) any payment which is chargeable under the head
"Salaries" if it is payable without the taxable territories and tax
has not been paid thereon nor deducted therefrom under section 18." An
analysis of this sub-section would show that in computing the income under this
head the assessee is entitled to deduction in respect of the expenditure
incurred solely for the purpose of earning such income, provided the
expenditure is not of a capital nature and does not include any personal
expenses incurred by the assessee. In other words, before this provision could
apply the following conditions must be fulfilled:
(i) the expenditure must have been incurred
solely and exclusively for the purpose of earning income or making profit;
(ii) the expenditure should not be in the
nature of a capital expenditure;
(iii) the amount in question should not be in
the nature of personal expenses of the assessee;
(iv) that the expenditure should be incurred
in the accounting year; and (v) there must be a clear nexus between the
expenditure incurred and the income sought to be earned.
In Eastern Investments Ltd. v. Commissioner
of Income-tax, West Bengal(1) the facts were that the assessee which was an
Investment Company was formed for acquiring. holding and dealine in shares and
Government securities belonging to C.
C died and S was appointed Administrator of
his estate and in that capacity he sold 50,000 ordinary shares. Money was
required by the Executor of C and he entered into an agreement with the
assessee Company by which the assessee (1) 20 I.T.R. 1 543 agreed to reduce its
share capital by Rs. 50 lakhs by taking over from the Administrator 50,000
shares at Rs. 100/per share and to receive instead debentures of the face value
of Rs. 50 lakhs carrying interest at 5% per annum. The agreement was sanctioned
by the High Court and was ultimately carried out. The transaction was held to
be genuine. The Appellate Tribunal and the Calcutta High Court took the view
that in computing the income of the assessee the interest paid on the
debentures could not be deducted under s. 12 (2) of the Act as this was not an
expenditure for the purpose of earning the income. This Court, while reversing
the judgment of the Calcutta High Court, held that once the transaction was
held to be a genuine one it clearly fell within the purview of s. 12(2) of the
Act and the interest paid by the assessee was a permissible deduction under s.
12(2) of the Act. In this connection, this Court observed as follows: "On
a full review of the facts it is clear that this transaction was voluntarily
entered into in order indirectly to facilitate the carrying on of the business
of the company and was made on the ground of commercial expediency. It
therefore falls within the purview of Section 12(2) of the Income-tax Act,
1922, before its amendment.
This being an investment company, if it
borrowed money and utilised the same for its investments on which it earned
income, the interest paid by it on the loans will clearly be a permissible
deduction under Section 12(2) of the Income lax Act." The aforesaid case
appears to be on all fours with the facts in the present case. In the instant
case also it is not disputed before us that the agreement entered into between
the parties was a genuine one. In fact the Tribunal had also held that the
agreement was actually acted upon. Once this was so, then the interest which
the assessee paid on the loan of Rs. 44,14,990/which came to Rs. 2,04,744/was
really paid for the purpose of earning income, namely, the dividends, bonuses
etc. which were held by the Bank for the benefit of the assessee. The interest
of Rs. 2,04,744/paid by the appellant could not be said to be of a capital
nature, nor could it be, deemed to be personal expense& incurred by the
assessee. In these circumstances, therefore, the essential ingredients of s.
12(2) are fully satisfied in this case and on the authority of this Court in
Eastern Investments Ltd.'s case (supra) the appellant's case squarely falls
within the four corners of s. 12(2) as a result of which the amount of interest
of Rs. 2,04,744/was a permissible deduction under s. 1 2 (2) of the Act.
In Bombay Steam Navigation Co. (1953) Private
Ltd. v. Commissioner of Income-tax Bombay(1), in somewhat similar
circumstances, this Court allowed the expenditure as a deduction under s. 10(2)
(xv), and observed as follows :
"But in our judgment interest paid by
the assessee-company is a permissible deduction under Section 10(2) (xv) (1) 56
I.T.R. 52. 59.
544 which permits any expenditure not being
an allowance of the nature described in any of the clauses (i) to (xiv)
inclusive and not being in the nature of capital expenditure or personal
expenses of the assessee laid out or expended wholly and exclusively for the
purpose of such business, profession or vocation" as a permissible
allowance in the computation, of profits or gains of the business carried on in
the year of account...... The expenditure was incurred after the commencement
of the business. The expenditure is not for any private or domestic purposes of
the assessee-company. It is in the capacity of a person carrying onbusiness
that this interest is paid." This Court further observed "Whether a
particular expenditure is revenue expenditure incurred for the purpose of
business must be determined on a consideration of all the facts and
circumstances, and by the application of principles of commercial trading. The
question must be viewed in the larger context of business necessity or
expediency. If the outgoing or expenditure is so related to the carrying on or
conduct of the business, that it may be regarded as an integral part of the
profit--earning process and not for acquisition of an asset or a right of a
permanent character, the possession of which is a condition of the carrying on
of the business, the expenditure may be regarded as revenue expenditure."
Apart from these decisions of this Court, a number of decisions of the High
Courts have also taken the same view.
In Ormerods (India) Private Ltd. v.
Commissioner of Incometax, Bombay City(1), the Bombay High Court allowed
certain sums of money paid as interest on borrowed capital for the purchase of
shares and held that the word " purpose" in the expression
"expenditure incurred solely for the purpose of making or earning such
income, profits or gains" did not mean motive for the transaction, much
less can it mean ulterior motive, or ulterior object. The Court held that as
the investments were made for the purpose of earning income, the interest paid
thereon would be deductible under s. 12(2) of the Act.
A similar view was taken by the Allahabad
High Court in.
J.K. Commercial Corporation Ltd. v.
Commissioner of Income tax, U.P.(2) where it was held that any expenditure
incurred for preservation or protection of a capital asset was revenue in
nature. The Court held that legal and travelling expenses incurred by the
assessee for protecting dividend income and to ensure the prospective dividend
earning capacity were clearly allowable under S. 12(2) of the Act. We find
ourselves in complete agreement with the view taken by the Allahabad High Court
in that case.
(1) 36 I.T.R. 329.
(2) 72 I.T.R. 296.
54 5 In Smt. Nirmala K. Doshi v. Commissioner
of Income-tax, Bombay City II(1), the Bombay High Court held that payment of
interest for earning dividend income was deductible under s. 12(2) of the Act.
Commissioner of Income-tax, Bombay City I v.
H. H.
Maharani Vijaykuverba Saheb of Morvi(2), a
Division Bench of the Bombay High Court held that the deduction which is
permissible under sub-s. (2) of s. 12 is all expenditure incurred solely for
the purpose of making or earning the income which has been subjected to tax and
the dominant purpose of the expenditure incurred must be to earn income.
It was further held that the connection
between the expenditure and the earning of income need not be direct, and even
an indirect connection could prove the nexus between the expenditure incurred
and the income. We fully agree with the view taken by the Bombay High Court.
In view of the direct decision of this Court
in Eastern Investments Ltd.'s case (supra), it is not necessary for us to
multiply authorities. Summarising therefore, the facts of the present case, the
position which emerges is as follows (1) that a genuine and bona fide contract
had been entered into between the assessee and the Bank for transfer of large
number of shares to the assessee;
(2) that the assessee in pursuance of this
agreement had raised a loan of Rs' 44,14,990/from the Bank in order to acquire
the shares and had paid interest of Rs. 2,04,744/for this purpose-, and (3) as
a result of the aforesaid acquisition, under cl. (3) of the agreement the
dividends, rights, bonuses etc.
held by the Bank were held for the benefit of
the assessee after they were declared. it is obvious that if the assessee would
not have paid the interest on the loan raised by him he would not have been
able to get the dividend income.
In these circumstances, therefore, there was
a direct nest between the expenditure of Rs. 2,04,744/incurred by the assessee
as interest and the earning of the dividend income.
The assessee has clearly established that the
expenditure aforesaid was incurred solely and wholly for the purpose of earning
the bonuses and dividend income. As the shares were not the stock-in-trade of
the appellant it could not be said that the interest paid by the assessee to
the Bank was an expenditure of a capital nature, nor was there any material to
show that the expenditure incurred by the assessee amounted to his personal
expenses. In these circumstances, we are satisfied that the case of the
appellant in paying the interest amounting to Rs. 2,04,744/falls clearly within
s. 12(2) of the Act and the conditions of the aforesaid provision being
fulfilled the assessee was in law entitled to deduction of the amount of (1) 82
I.T.R. 648.
(2) 1 00 I.T.R. 67.
11-930SCI/77 546 Rs. 2,04,744/unders. 12 (2)
of the Act. We are, therefore, of the opinion that the High Court and the
Tribunal were wrong in taking the view that the Income-tax authorities rightly
disallowed the amount of Rs. 2,04,744/as claimed by the assessee. We are
clearly of the opinion that this amount was a permissible deduction under s.
12(2) of the Act and should have been allowed by the Income-tax authorities. In
these circumstances, therefore, we bold on question No. (1) that both the
Tribunal and the High Court should have held that the assessee's claim for
deduction of interest amounting to Rs. 2,04,744/was wrongly rejected by the
Income-tax authorities.
So far as Question No. 3 relating to damages
of Rs. 1,05,000/paid to the Bank by the assessee for non-delivery of the shares
is concerned, we are unable to agree with counsel for the appellant that this
was a deductible expenditure. We have already pointed out that the assessee's
main business was not dealing in shares and, therefore, the damages paid were
due to his own default and would, therefore, be a capital expenditure rather
than a revenue one. The High Court and the Tribunal were right in disallowing
this amount.
As regards question No. (4) the position is
somewhat obscure. While the Tribunal had deleted the amount of Rs. 95,664/from
the total income of the assessee, the High Court also agreed with the Tribunal
and answered this question in the affirmative against the Revenue. Learned
counsel for the Revenue has, however, submitted that if we are of the opinion
that the appellant should be entitled to the deduction of Rs. 2,04,744/under S.
12(2) of the Act, then it automatically follows that he cannot claim exemption
in respect of the dividend income. In our opinion the argument of Mr. V. P.
Raman, learned counsel for the Revenue is well founded and must prevail. Even
Mr. 'Bishamber Lal appearing for the assessee/appellant was fair enough to
concede that if we hold that the interest of Rs. 2,04,744/was a permissible
deduction under S. 12(2) of the Act then he would not press his claim before
the Income-tax authorities for deletion of the dividend income of Rs. 95,664/and
he would have no objection if this. Court sets aside this deletion. In this
view of the matter we set aside the order of the High Court as also that of the
Tribunal deleting the amount of Rs. 95,664/which will be included in the total
income of the assessee.
The result is that the appeal is allowed in
part and our finding on Question No. (1) is that the High Court and the
Tribunal were wrong in disallowing the deduction of Rs. 2,04,744/as claimed by
the assessee. The assessee is, therefore, entitled to a deduction of this
amount from his total income. We affirm the judgment of the High Court in
disallowing the claim of Rs. 1,05,000/which forms the basis of Question No.
(3). as the appeal has partially succeeded and partially failed, we leave the
parties to bear their own costs in this Court.
P.B.R. Appeal allowed in part.
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