1966 (8) TMI 2

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.... is a statement of the case under section 66(l) of the Income-tax Act, 1922 (hereinafter referred to as the Act). The question referred is: "Whether the expenditure of Rs. 3,750 incurred by the assessee is an allowable item of deduction under section 10(2)(xv) of the Income-tax Act ?" The material facts are these : The relevant year of assessment is 1958-59, the previous year being the year ....

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.... a new asset of an enduring nature. On second appeal to the Tribunal, the agreement with the bank was not forthcoming and so it proceeded to decide the case on the basis of the facts found by the authorities below and endorsed the view that the expenditure was capital in nature. Hence, this reference by the assessee. The admitted fact would appear to be that the expenditure was incurred for obt....

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....gs into existence an asset of an enduring nature. In the statement of the case it is conceded that the expenditure was for the purpose of obtaining an overdraft from the bank. Overdraft facilities are generally for a limited period renewable from time to time, and as such no quality of permanence or of an enduring nature can possibly be ascribed to it. In any event, there is no material on the rec....

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....ss to ascertain taxable income ". On the facts of that case, their Lordships held, " that the money secured by the loan was a thing for the use of which this expenditure was made. In principle, apart from any statutory provisions, we see no distinction between interest in respect of a loan and an expenditure incurred for obtaining the loan ". It is no doubt true that in that case a specific loan o....