M. K. BROTHERS (P) LTD . versus C.I.T. KANPUR

M. K. BROTHERS (P) LTD . versus C.I.T. KANPUR

The sum retained and adjusted against Sharma & Co.'s account, paid in consideration of appointment as sole selling agent, is capital expenditure for acquiring an asset of enduring benefit; thus, it is not deductible as revenue expenditure and is assessable income.

Source-derived case information.

Parties
Appellant: M. K. Brothers (P) Ltd.; Respondent: C.I.T. Kanpur
Jurisdiction
India
Judgment Date
29 August 1972
Procedural Posture
Civil Appeal / Appeal From Judgment of Allahabad High Court by Certificate Under Article 133 of the Constitution
Outcome
appeal dismissed
Legal Topics
Income Tax, Capital Expenditure Vs Revenue Expenditure, Deductions
Taxation Law Income Tax Capital Expenditure Vs Revenue Expenditure Deductions

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Parties

M. K. Brothers (P) Ltd.

Appellant

C.I.T. Kanpur

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment of Allahabad High Court by Certificate Under Article 133 of the Constitution

Legal Issues

  1. 1 Whether the sum retained by British India Corporation and adjusted to the credit of Sharma & Co. was the assessable income of the appellant company.
  2. 2 Whether the sum represented an expenditure under section 10 of the Indian Income Tax Act, 1922.

Ratio Decidendi

The sum retained and adjusted against Sharma & Co.'s account, paid in consideration of appointment as sole selling agent, is capital expenditure for acquiring an asset of enduring benefit; thus, it is not deductible as revenue expenditure and is assessable income.

Court Disposition

appeal dismissed

Orders

  • Appeal dismissed with costs.