MASK AND CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is an appeal preferred by the Income-tax Officer, Cuddalore, praying that the amount of Rs. 6,203 allowed by the Appellate Assistant Commissioner as business expense to the respondent may be disallowed. The question arose in the following circumstances :-

(2.) THE respondent was assessed on an income of Rs. 28,971 from various sources and a sum of Rs. 6,203 was claimed by the respondent on account of court and damages which he had to pay to one Salai Mohammad Haji Ibrahim Sait. THE respondent and three others, has entered into an agreement in 1933 in connection with business in crackeras to sell several kinds of cracker at the rates given in the Schedual thereto. THE respondent did not abide by the terms of this agreement and sold his crackers at rates lower than those given in the schedu le, where upon Salia Mohammad Haji Ibrahim Sait filed a suit for damages of Rs. 5,000 aginst the respondent. THE High Court of Judicature at Madras on its original said in suit C. S. No. 146/34 awarded damages of Rs. 5,000 as well as the court costs to the plaintiff in that case. THE respondent paid the damages and incurred expenses for defending the suit amounting to Rs. 1,203. THE respondent claimed this sum of Rs. 6,203 as a business expenses, which the Appellate Assistant Commissioner had allowed.

(3.) IN another case reported in Secretary, Board of Revenue, INcome-tax, Madras v. B. Muniswami Chetty & Sons, it has been held :-