TaxTMI 
TaxTMI 
1990 (1) TMI 327
X X X X Extracts X X X X
X X X X Extracts X X X X
....g company during the relevant previous year, the Tribunal was right in holding that the expenditure of ₹ 75,000 incurred in fulfillment of the condition for so carrying on of the business represented expenditure of capital nature ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the surtax liability under the Companies (Profits) Surtax Act, 1964, for the assessment year 1978-79 was not an allowable deduction in the income-tax assessment for the said assessment year ? The assessment year involved is the assessment year 1978-79. The relevant accounting period was the year ended on 31-3-1978. 2. So far as the first question is concerned, the facts found by the Tribunal are as unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... conditional and would not be effective unless approval was obtained from the Reserve Bank. In other words, the assessee which is an Indian company came into existence as a result of the amalgamation itself. If at all the business had to be discontinued without amalgamation, that was the business of the predecessor company and not that of the present assessee. The present assessee came into existence by the factum of the amalgamation itself. Therefore, this expenditure was capital so far as the assessee was concerned. The question in dispute was considered by Calcutta High Court in Bengal & Assam Investment Ltd. v. CIT [1983] 142 ITR 156. In this case the ITO had disallowed the claim of the assessee for deduction of ₹ 6,077 incurred i....