TaxTMI 
TaxTMI 
1984 (7) TMI 354
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....and 1969-70, the previous years being the financial years ended on 31-3-1967, 31-3-1968 and 31-3-1969, respectively. In this case also, the ITO had come to the conclusion that Mr. Gautam Sarabhai was not the employee of the said company. He, therefore, came to the conclusion that the remuneration received by the assessee was taxable under the head 'Income from other sources'. The AAC, Ahmedabad, confirmed that decision and the matter was carried before the Tribunal. The Tribunal held that the assessee was an employee of Karamchand Premchand (P.) Ltd. It was, therefore, held that the remuneration received by the assessee in each year was taxable as income from salaries and not income from other sources. The assessee had made contr....
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....e assessee from the aforesaid company was assessable as 'income from salaries', the assessee's contribution to the provident fund would be includible in the hands of the assessee subject to rule 6(a) of Part A of the Fourth Schedule to the Act for the assessment years 1968-69 and 1969-70. Similarly, interest on contribution amounting to Rs. 3,807 for the assessment year 1969-70 was also held to be includible in the hands of the assessee subject to rule 6{b) of Part A of the Fourth Schedule to the Act. The Tribunal further held that since there was no income chargeable under the head 'Salaries' for the assessment year 1967-68, the question of inclusion of the employer's contribution in the hands of the assessee did no....
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....sessee. The Tribunal, following its decision in the case of Smt. Kamalini Khatau v. ITO [IT Appeal No. 1602 (Ahd.) of 1971-72 decided on 21-11-1974], held that the aforesaid amount of Rs. 13,938 was not includible in the hands of the assessee. Another item was that the ITO disallowed the interest to the extent of Rs. 4,043 on the ground that borrowed funds to the extent of Rs. 82,800 were utilised for the purchase of shares of Bag House (P.) Ltd. and no income had been earned on these shares. The AAC allowed the deduction of the said interest of Rs. 4,043. The Tribunal, following the decision of the Bombay High Court in Ormerods ( India) ( P.) Ltd. v. CIT [1959] 36 ITR 329, confirmed the order of the AAC allowing the assessee's claim wi....
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....e assessee was a director to the recognised superannuation fund was includible in the hands of the assessee, subject to rule 6(a) of Part A and rule 5 of the Part B of the Fourth Schedule to the Income-tax Act, 1961? 5. Whether, on the facts and in the circum stances of the case, the Tribunal was right in law in holding that the interest on the accumulated balance of the provident fund was includible in the hands of the assessee subject to rule 6(b) of Part A of the Fourth Schedule to the Income-tax Act, 1961? 6. Whether, on the facts and in the circum stances of the case, the reimbursement of medical expenses by Karamchand Premchand (P.)....
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....is concerned, we may refer to a case of Ormerods ( India) ( P.) Ltd. (supra) . Before actually referring to this case, we may here state that the assessee purchased shares of Bag House (P.) Ltd. and the company gave properties on rent at concessional rates to its employees and, therefore, did not earn any profit. For the purpose of purchasing shares, the assessee borrowed the amount and paid a sum of Rs. 4,043 as interest. The ITO thought that as the amount was invested in shares of a company from where dividend was not likely to come, the borrowing for the purpose of purchasing such shares and interest paid thereon, should not be allowable as deductions. The AAC, for good reasons, came to a different conclusion. Before the AAC, it was argu....
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....is the case of CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 (SC). In that case, it was observed as under: "The plain natural construction of the language of section 51( iii) of the Income-tax Act, 1961, irresistibly leads to the conclusion that to bring a case within that section it is not necessary that any income should in fact have been earned as a result of the expenditure, what section 51(iii ) requires is that the expenditure must be laid out or expended wholly and exclusively for the purpose of making or earning income. The section does not require that this purpose must be fulfilled in order to qualify the expenditure for deduction: it does not say ....