COMMISSIONER OF INCOME TAX Vs. P N ETHIRAJ

JUDGEMENT

(1.) THE question for our consideration is :

(2.) THE reference has been made on behalf of the Commissioner of Income-tax, who attacks the finding of the Tribunal that these amounts are allowable items of expenditure, being valid expenditure incurred for the purpose of the business presumable under section 10(2)(xv) of the Act. THE department contends that these payments represent outlays in respect of capital acquisition and are of a capital nature. In order to appreciate the contentions of either side, following facts are relevant :

(3.) IN the appeal before him, the Appellate Assistant Commissioner also rejected the claim holding that the annual payments made over a period of years in a case where one partner acquires the right to conduct a firm's business for a period of years as the sole owner thereof, constituted capital disbursements for they were made to acquire the concern or to acquire the right to conduct the business. He relied upon IN re Ramji Das Jaini and Co. in coming to that conclusion.