HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, West Bengal v. Indian Molasses (P) Ltd.
Civil Appeal No. 2555 of 1966
[1971] 1 SCR 773 ·
Indian Income-tax Act, 1922: sections 10(2)(xv), 10(4A), 66(1) and 66(5)
Sources & disclosures includedDownload original judgment / order
3-judge bench; unanimous judgment delivered by J. C. Shah, J. · J. C. Shah, J. · K. S. Hegde, J. · A. N. Grover, J.
Assessment years: 1956-57
01 · Facts of the case
The company funded trustees for a managing director's future pension and a widow's annuity. When he died before retirement in 1955, it claimed the accumulated and additional amounts as business expenditure for 1956-57 (SCR pp.773-777; PDF pp.1-5).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
The obligation became effective at death, so the amounts were expended in 1955. But allowance also required non-capital character, exclusive business purpose and section 10(4A) compliance. Those aspects fell within the referred question even if not separately argued, and the Tribunal had made no findings (SCR pp.777-782; PDF pp.5-10).
Source: Primary judgment: discussion
03 · Judicial decision
The Court declined to answer the second question and left the Tribunal to dispose of the appeal under section 66(5) after deciding the omitted issues; no costs were ordered (SCR pp.781-782; PDF pp.9-10).
Source: Primary judgment: decision
04 · Outcome / in whose favour
No final deduction victory: expenditure timing was resolved for the company, but deductibility was remitted for complete statutory findings (SCR pp.778-782; PDF pp.6-10).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: separate when a contingent funding arrangement becomes expenditure from whether every deduction condition is met. Frame reference questions broadly enough to capture statutory ingredients, but preserve fact-finding limits (based on SCR pp.778-782; PDF pp.6-10).
Source: Primary judgment: review point
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
The decision applies repealed 1922 Act deduction and reference procedure; current pension, remuneration and appellate provisions were not checked.
Later treatment
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