Smt. Padmavati Jaikrishna v. Addl. Commissioner Of Income Tax, Gujarat Ahmedabad

7qaataadl TAGE Fo HAT TraRe algae, 9. ata wane get tat afi aladtsdi aa Far Fz arsarea at feat stat &|:| aie afer Bt 7S| [1987] 4 dto fio To 427 TaAraa wage (TAT) aATH AIT ATA-HE ATTA THIS 22 ata, 1987| caragia taata fees site eatagiat Bo To fag ara-at afefraw, 1961 (1961 st 43) aret 57 (iii) ara ata & ataat aTat —ata-we, Ta BT ale atfan feta wt aera Hea F fau faa ay sazat cual at sata B dda A welat ar crat— awl at dara Hatfedl Faateayatfaeat at get wet & fae aay H wa A AA a site atts frete rat arfacaat get ara & fagQA a Wa oa org ata Hea F faa qos: AT AAA: 7ah & sat fag arraz afafaaa, 1961 at art 57 (ii) % aeita watfaat aver aah Et aah Et Etoe| ata aver aah Et aah Et Et fraifeay at cafte & wrt fate fear aar e att ga sara, arataraf % wT A aeq Mat’ a ara agerea Be Si fra aT FATT as 1966-67%)fratfedt+ ga ad & aera vas sre fay wy Fart ay aaa sa26,986 ere at wetat & fae svat fear. arawe afaarey BT ae aa aT fHsat Fa aeafas fatrart jaar 1,250 erg at ait aT aTvat argatasBrae TT 10,279 BIT at HAT TH atay AAA He feat) GasaAGare agarar ara-azt afafraa,1961 at are 57 (iii)& ate age aa Pra aTAHA|oe| faaifedt arr were arene aga (atta) at at Te cae attheaTaat Htag at afm & aaa ate at att Bl aT Te fratheataia at ag seta Far Aecrat aar ar fe ara-we Ae ga-a< gat arias fretsdara Baten F adler ag Hl seg cay FH STF Arar sar arfay atx wagare & data F sare Fart wt ATT fear svat afer afte A ay 428 dea smraraa frie ata [1987] 4 sae fio Yo aifer at a1 safe fratfedt & araar sea eraray at fade eA fae ar saat ca & fee faeafafad sea fafece. frat— “aay ava F deat ate ofeeafaat st seat ge 10,279 wae FSAIS BT TATA AT-HX afta, 1961 st arer 57 (iii) F aete oH Wel erat at?”a goa araraa & fatter ache fafese at ate arazar ag faore frat gyfauifedt % faeg fafafeaa fear fe gata ana ot fauifedd & fae aferfray HAT aeTHT at ate VS fata F gree sara ar ata fHar arar Haatarasfirs at| Set aaa ar ag et Ae oT fe Sart aT wa TT ara afaraHU H TATA H AT Gora: ate gay VIA aay st ga Her F fw arafaa aeaT att gafay ag afafran at aver 57 (iii) ® ate set aratFt ae artaTUT sea eaTaTaT F fra F faxes waa sat at Ast aita aferHI EY,|Oo afafaaifva—ee ara & fac fe aetdt arcarat arawart arah faatfect at ara-at afirard ar ag area wear at fe gare wT sata, Fras daeH well & wr FH arar fear war 2, Vat ara ger wea ar asa awa F wasra Hfag aqua: att aaa: seta feat wat ar faa aetdt B fare erat fearqarary (Fe 6)||| Sa arate Faq ara-Ht AIT ga-HT aa arfuat F AaaFH aaaarfaca at ger wet & fee arsat aw areae ate gat H arfaea HT TTww ada g areda Hae aafers ot ole yak dara a ara atea Hea& waist % far agia: ate aaeqa: sara gat ate feat gat aaa at ATATaT aha| Tet aH atigs frets at ate gs afrnen ae Goa ITT Fawel froma oe aga & fie ger cater ee H eT A arafaa Hear aa otfarg fray aot & argh atfaca at ger wear ary walel faa are far raratau, wee fe aa gia: ae aaa eT a aa aia weaFH yah & fagatat afar| aea araeet fasag frarat area sifsarfeal A ag faswe facta 3fer oar aT BIg AT aT atfeafara Bl aver 57 (iii) HY ofefer H areata wet atar aera twa ae fH sare cad Mata aafaaarfrea BT Ger Hwfac sata a feat Tar a aa aH areca: Helal F faa sal ay eaVHTT Har* @fsa dtr (FT 9) fatzcz fauia [1979] [1979] 4 smo fito To 128 : 1978 argo ato ATTo (115) 519;.fFarent aged, taal daar gare TaeR ware AT; 1972 % ara-art fade go35 5 THUA GT TAT F ala3 Fada, 1973 w frote ate area & fares ah ay ariter| atarat at ate aft dlo Uo THAR, AAA Ho WaT ATT._ att at tao do Tea| reat Bt att a aft do to FaTy AIX Fo Uo gurfauit eaprraa ar frota exraafas Grave farst 7 fea | sarania fan—ag afta Trea sea aafaa F fees wareHT aT ARS. SMT. PADMAVATI JAIKRISHNA v. ADDL. COMMISSIONER OF INCOME .TAX. GUJARAT AHMEDABAD APRIL 22, 1987 (R.S. PATHAK, C.J. RANGANATH MISRA AND K.N. SINGH, JJ.] Income Tax Act, 1961-Section 57(iii)-Deduction-Claim for-Expenditure incurred should be wholly and exclusively for purpose of earning income-Assessee to satisfy Income Tax Officer. The assessee, assessed as an individual, derived income from "other sources" in the shape of interest, dividends etc, Jn the asse~· ment year 1966-67 she claimed deduction of Rs,U,986 being interest paid on loans taken by her, under s. 57(iii). ~Hhe Income Tax Act, 1961. The Income Tax Officer fe;>u~<l ~at out of the loans real investment was Rs.1,250 only. He disalluw~ the claim of Rs.10,275 on proportionate basis. 1'h':: Aepel~~~~ As~istamt Commissioner relying upon the ratio of \he. ~cisioo ii\ lttti Bhuriben Lallubhai v. Commissioner of Income-tax, ~o.m#J,qy North Cutch and Saurashtra, [1956 ITR (XXIX) 543] dismis· li"d the appeal of the assessee. Before the Tribunal the assessee contended: (1) that expenditure under the head of payment of income tax and wealth tax and annuity deposits should have been taken as revenue expenditure and the claim of interest •ll re$pect of such loans should have been admitted and (2) ,.J..) that the assessee instead of liquidating the investments which was return-oriented, found it commercially expedient and viable to raise a loan Instead of disturbing the investments and, therefore, the claim ~ [became admissible. The '(ribunal rejecting the contentions and dismis-]sing the appeal observed that the loans were taken for meeting her personal obligation like payment of taxes and deposit of annuity and these had nothing to do with the business. On reference, the High Court held that at the relevant time it was obligatory for the assessee to make the annuity deposit and the earning of ipterest through such deposit was merely incidental and that the portion of the loan was not intended to meet expenditure wholly ~md exclusively for the purpose of earning the income and, therefore, did not come under s. 57(iii) of the Act. Dismissing the appeal of the assessee the Court, A HELD:l. Unless the claim comes within the purview of s. 57(iii) of the Income Tax Act, 1961 it· would not be admissible as a deduc-tion. [1170C] · 2. The ~est t~ apply is that the expenditure should be wholly and exclusively for the purpose of earning the income. [ 1172C] Eastern 'Investments Ltd. v. Commissioner of Income-tax, West Bengal, [1951) ITR 20 1 and Commissioner of Income-tax, West Bengal v. Rajendra'Prasad Moody. [1978) 115 ITR 519, followed. 3. In order that t,he claim for deduction could~ sustained, it was for the assessee to satisfy the Income Tax Officer that the loan, interest fo respect of which is claimed as deduction, was laid out or expended }-wholly and exclusively for earning the income from out of which the deduction was claimed. [1170F-GJ 4. The Income Tax Authorities as also the High Court have cl~arly recorded a factual finding of facts that the expenditure in this case was to meet the personal liability of payment of income-tax and wealth-tax and annuity and that no part of the expenditure came within the purview ofs. 57(iii) of the Act. [1171H-1172A, D] ... L.:. 5. This Court is inclined to agree with the High Court that so far as meeting the liability of income-tax and wealth-tax is concerned, it was indeed a personal one and payment thereof cannot at all be said to be expenditure laid out or expended wholly and exclusively for the purpose of earning income. So far as annuity depos~t is concerned, the F Tribunal and the High Court have come to the right conclusion that the dominant purpose was not to earn income by way of interest but to meet the statutory liability of.making the deposit. [1172B-C] 6. Unless the loan is incurred for meeting the liability connected