COMMISSIONER OF INCOME TAX Vs. ARUN THOMAS

JUDGEMENT

(1.) Introduction:

(2.) Section 37 of the IT Act disallows deduction of expenditure on activities I treated as an offence, or prohibited by law. The assessee, maintains that the IT Act has nothing to do with the source of business, and any infraction must belong to the Kerala Money Lenders Act, under which there is an efficacious, exhaustive mechanism to take care of such infractions. Is the assessee right ? Our answer is 'No'.

(3.) The respondent assessee, Arun Thomas, is the proprietor of M/s Kannattu Arun Finance, a money leading concern, with headquarters at Chengannur and branches at 12 other places. The Revenue processed Arun Thomas's IT return for the asst. yr. 2008-09 on 28th July, 2009 and refunded Rs. 1,27,783.