{"id":34734,"date":"1979-04-17T00:00:00","date_gmt":"1979-04-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979"},"modified":"2015-04-14T20:44:07","modified_gmt":"2015-04-14T15:14:07","slug":"madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979","title":{"rendered":"Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., … on 17 April, 1979"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., … on 17 April, 1979<\/div>\n
Equivalent citations: 1979 AIR 1291, \t\t 1979 SCR (3) 745<\/div>\n
Author: V Tulzapurkar<\/div>\n
Bench: Tulzapurkar, V.D.<\/div>\n
           PETITIONER:\nMADHAV PRASAD JATIA\n\n\tVs.\n\nRESPONDENT:\nCOMMISSIONER OF INCOME TAX, U.P., LUCKNOW\n\nDATE OF JUDGMENT17\/04\/1979\n\nBENCH:\nTULZAPURKAR, V.D.\nBENCH:\nTULZAPURKAR, V.D.\nBHAGWATI, P.N.\n\nCITATION:\n 1979 AIR 1291\t\t  1979 SCR  (3) 745\n 1979 SCC  (3) 634\n CITATOR INFO :\n R\t    1989 SC1866\t (16)\n\n\nACT:\n     Income-Tax Act  1922, Section  10(2) (iii), 10(2) (xv)-\nDeduction against business income-Conditions to be satisfied\nunder Section  10(2)  (iii)  and  10(2)\t (iv)  for  claiming\ndeduction, explained-Words  and Phrases-\"For  the purpose of\nbusiness\", scope of.\n\n\n\nHEADNOTE:\n     The appellant-assessee  carried  on  money-lending\t and\nother businesses  and derived  income from  various  sources\nsuch as\t investment  in\t shares,  properties  and  business.\nPursuant to  her promise  to donate a sum of Rs. 10 lacs for\nsetting up  an Engineering College to commemorate the memory\nof her late husband, she actually made over a sum of Rs. 5.5\nlacs by depositing the same in a joint account opened in the\nname  of  the  District\t Magistrate,  Bulandshahr  and\tSmt.\nIndermani Jatia for the College. The balance of Rs. 4.5 lacs\nwas left  with the assessee and was treated as a debt to the\ninstitution and interest thereon at 6% per annum with effect\nfrom October  21, 1955\twas to\tbe finally  deposited in the\ntechnical  institute   account.\t Though\t  in  the  books  of\naccounts, on  November 21,  1955, a  sum of  Rs. 10 lacs was\ndebited to  her capital account and corresponding credit was\ngiven to the account of the institute, the assessee actually\npaid the  sum of  Rs. 5.5 lacs to the institution on January\n7, 1956\t from the  overdraft account  which she had with the\nCentral Bank of India, Aligarh.\n     In the  assessment proceedings for the assessment years\n1957-58,  1958-59,   1959-60,  the   assessee  claimed\t the\ndeduction of  these sums-Rs.  20,107\/- Rs.  25,470\/- and Rs.\n18,445\/- being\tthe respective items of interest paid by her\nto the\tbank on\t Rs. 5.5  lacs during  the samvat years. The\nassessee contended  that she  had preferred  to draw  on the\noverdraft account  of the bank for the purpose of paying the\ninstitution in\torder to  save her  income  earning  assets,\nnamely, the  shares, which  she would  have  otherwise\tbeen\nrequired to  dispose of\t and therefore, the interest paid by\nher should  be allowed. As regards interest on the remaining\nsum of\tRs. 4.5\t lacs (which  was left\tas a  loan with\t the\nassessee) that\twas debited  to her  account,  the  assessee\nclaimed that it was a permissible deduction.\n     The taxing authorities took the view that the claim for\ndeduction was  not admissible either against business income\nunder section 10(2) or against income from investments under\nsection 12(2)  of the  Income Tax  Act,\t 1922.\tThe  appeals\npreferred to  the Appellate  Tribunal failed. The references\nmade to the High Court went against the assessee.\n     Dismissing the appeals by special leave, the Court\n^\n     HELD: 1.  Under section  10(2)(iii) of  Income Tax Act,\n1922, three conditions are required to be satisfied in order\nto enable  the assessee\t to claim  a deduction in respect of\ninterest on borrowed capital, namely, (a) that money\n746\n(capital) must\thave been borrowed by the assessee, (b) that\nit must\t have been  borrowed for the purpose of business and\n(c) that  the assessee must paid interest on the said amount\nand claimed it as a deduction. [755B-C]\n     2. As  regards the\t claim for  deduction in  respect of\nexpenditure under  s. 10(2)  (xv), the\tassessee  must\talso\nsatisfy three  conditions namely  (a) it  (the\texpenditure)\nmust not  be an allowance of the nature described in clauses\n(i) to\t(xiv); (b)  it must  not be in the nature of capital\nexpenditure or\tpersonal expenses of the assessee and (c) it\nmust have  been laid  out or expended wholly and exclusively\nfor the purpose of his business. [755C-D]\n     3.\t The   expression  \"for\t the  purpose  of  business\"\noccurring in  s.10(2)(iii) as  also in 10(2)(xv) is wider in\nscope than the expression \"for the purpose of earning income\nprofits or  gains\" occurring  in s.  12(2) of  the Act\tand,\ntherefore, the\tscope for  allowing  a\tdeduction  under  s.\n10(2)(iii) or  10(2)(xv) would\tbe much\t wider than  the one\navailable under s. 12(2) of the Act.\n\t\t\t\t\t\t    [755D-E]\n     Commissioner of  Income Tax  v.  Malayalam\t Plantations\nLtd.,<\/a> 53 ITR 140 (SC); applied.\n     4. Neither\t there had  been any  confusion of the issue\nnor any\t wrong approach\t had  been  adopted  by\t the  taxing\nauthorities, the Tribunal or the High Court. The case of the\nassessee had been considered both by the Tribunal as well as\nby the\tHigh Court under s.10(2) (iii) or 10(2) (xv) and not\nunder s.12(2).\tIn fact,  in Reference\tNo. 775\t of 1970 the\nquestions framed  by  the  Tribunal  in\t terms\treferred  to\ns.10(2)(iii) and  10(2)(xv) and\t proceeded to  seek the High\nCourt's opinion as to whether the sums representing interest\npaid by the assessee to the Central Bank on the overdraft of\nRs. 5.5 lacs for the concerned three years were allowable as\ndeduction under either of the said provisions of the Act and\nthe  High   Court  after  considering  the  matter  and\t the\nauthorities on\tthe point  had come  to the  conclusion that\nsuch interest  was not allowable as a deduction under either\nof the said provisions. [743D-G]\n     5. It  is true  that the  High Court  did refer  to the\ndecision of  the Bombay\t High Court  in Bhai Bhuriben's case\nbut that  decision was\treferred to  only for the purpose of\nemphasising one\t aspect which  was propounded by that Court,\nnamely, that the motive with which an assessee could be said\nto have\t made the borrowing would be irrelevant. In fact the\nHigh Court found that there was no material to show that the\nassessee, in the instant case, would necessarily have had to\nemploy the  business assets  for making\t payment to charity.\nThe High Court actually considered the assessee's case under\nsection 10(2)  (iii) and 10(2) (xv) and disallowed the claim\nfor deduction  under these  provisions\tprincipally  on\t the\nground that the said borrowing of Rs. 5.5 lacs was unrelated\nto the business of the assessee. [745G-H, 755A-B]\n     Bhai Bhuriben  Lallubhai v. Commissioner of Income Tax,\nNorth Cutch and Saurashtra, 29 I.T.R., 543; explained.\n     (6) In the instant case:\n     (a) The  amount of\t Rs. 5.5  lacs having  been actually\nparted with  by the  assessee on January 7, 1956, and having\nbeen accepted  by the  institute the same being deposited in\nthe joint account of the assessee and the District\n747\nMagistrate, Bulandshahr\t for the  Engineering  College,\t the\ngift to\t that extent  was undoubtedly  complete with  effect\nfrom the said date. [756A-C]\n     (b) The  said payment made by the assessee by drawing a\ncheque on  the overdraft  account was  a borrowing which was\nmade to\t meet her personal obligation and not the obligation\nof the\tbusiness and  as such  expenditure incurred  by\t the\nassessee by  way of  payment of interest thereon was not for\ncarrying on  the business  nor in  her capacity\t as a person\ncarrying on  that business.  Such expenditure  could  by  no\nstretch of  imagination be regarded as business expenditure.\n[756C, F]\n     (c) It  is true that initially on November 21, 1955 the\ncapital account\t of the assessee was debited and the college\naccount was  credited with  the sum  of Rs.  10 lacs  in the\nbooks of  the assessee\tbut making  of these  entries in the\nassessee's books  would\t not  alter  the  character  of\t the\nborrowing nor would the said borrowing be impressed with the\ncharacter  of\tbusiness  expenditure  for  admittedly,\t the\nassessee maintained  only one  common set  of books in which\nwere incorporated  entries pertaining to her capital, assets\nand income  from all  her difference  sources. The borrowing\nwas completely\tunrelated to the purpose of the business and\nwas actually  used for\tmaking charity.\t It  is,  therefore,\nclear that  the interest that was paid on the sum of Rs. 5.5\nlacs to\t the bank  by the  assessee for\t the three concerned\nyears was  rightly held\t to be\tnot deductible\teither under\nsection 10(2)  (iii) or under section 10(2) (xv) of the Act.\n[756F-H, 757A]\n     Commissioner of  Income Tax,  Bombay City\tII v. Bombay\nSamachar Ltd.,\tBombay,<\/a> 74  ITR 723;  Commissioner of Income\nTax,  Bombay   City  IV\t v.  Kishinchand,  109\tI.T.R.\t569;\ndistinguished.\n     (d) Both  the Tribunal  as well  as the High Court were\nright in  taking the view that the certificate dated October\n17, 1958  was of  no avail  to the  assessee inasmuch  as it\nmerely stated  that the\t assessee had promised a donation of\nRs. 10\tlacs on\t October 21, 1955, out of which Rs. 5.5 lacs\nwere deposited\tin the\tjoint account maintained in the name\nof the assessee and the District Magistrate, Bulandshahr for\nthe college  and the  remaining sum of Rs. 4.5 lacs was left\nas a  loan with\t the assessee and interest thereon at 6% per\nannum was to be finally deposited in the technical institute\naccount. The  Tribunal and the High Court were also right in\ntaking two  views that beyond making entries in the books of\naccount of  the assessee  there was no material on record to\nshow that  the assessee\t had actually made over a sum of Rs.\n4.5 lacs to the college or that the college had accepted the\nsaid donation  with the\t result that  the amount credited to\nthe college  account in\t her books represented her own funds\nand lay\t entirely within  her power  of disposition and that\nbeing so,  the interest credited by the assessee on the said\nsum of\tRs. 4.5\t lacs and the accretion thereto continued to\nbelong to  the assessee, and, therefore she was not entitled\nto the deduction in respect of such interests, and [758C-G]\n     (e) If  no trust  in favour of the college in regard to\nthe amount  of Rs.  4.5 lacs could be said to have come into\nexistence either on October 21, 1955 or November 21, 1955 or\non any\tother subsequent  date during the relevant years, no\ndeduction in respect of interest credited by the assessee to\nthe account of the college over the said sum can be allowed.\n[759A-B]\n748\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE  JURISDICTION: Civil  Appeal Nos. 1831-
\n1833 of 1972.\n<\/p>\n
     Appeals by\t Special Leave\tfrom the  Judgment and Order
\ndated  22-9-1971   of  the  Allahabad  High  Court  in\tI.T.
\nReferences Nos. 775\/70 and 342\/64.\n<\/p>\n
     S.\t C.   Manchanda\t and  Mrs.  Urmila  Kapoor  for\t the
\nAppellant.\n<\/p>\n
     V. S. Desai and Miss A. Subhashini for the Respondent.
\n     The Judgment of the Court was delivered by
\n     TULZAPURKAR, J.-The  assessee,  Smt.  Indermani  Jatia,
\nwidow of Seth Ganga Sagar Jatia of Khurja, carried on money-
\nlending and other businesses and derived income from various
\nsources\t such\tas  investment\tin  shares,  properties\t and
\nbusinesses. However,  the  capital,  assets  and  income  in
\nrespect of  different sources of income were incorporated in
\none common  set of  books. With\t a view\t to commemorate\t the
\nmemory of  her deceased\t husband, on  October 21,  1955\t she
\npromised a  donation of\t Rs.  10  lacs\tfor  setting  up  an
\nEngineering College  at Khurja to be named “Seth Ganga Sagar
\nJatia Electrical  Engineering Institute\t Khurja”.  She\talso
\npromised a  further sum of Rs. 1.5 lacs for the construction
\nof a  Female Hospital at Khurja but this subsequent donation
\nof Rs.\t1.5 lacs  was to include the total interest that was
\nto accrue  on the  sum of Rs. 10 lacs earlier donated to the
\ncollege. In  pursuance of  the promise\tmade on\t October 21,
\n1955 she  actually made\t over a\t sum  of  Rs.  5.5  lacs  by
\ndepositing the\tsame in\t a joint account opened in the names
\nof the\tDistrict Magistrate,  Bulandshahr and Smt. Indermani
\nJatia for  the college while the balance of Rs. 4.5 lacs was
\nleft with  the assessee\t and was  treated as  a debt  to the
\nInstitution and interest thereon at 6% per annum with effect
\nfrom October  21, 1955\twas to\tbe finally  deposited in the
\nTechnical Institute account. These facts become clear from a
\ncertificate dated  October 17,\t1958, issued by the District
\nMagistrate,  Bulandshahr   which  was  produced\t before\t the
\nAppellate Tribunal.\n<\/p>\n
     The aforesaid  transaction came  to be  recorded in the
\nbooks of  the assessee\tas follows:  At the beginning of the
\naccounting year\t (Samvat year  2012-13-accounting period 13-
\n11-1955 to  1-11-1956) relevant to the assessment year 1957-
\n58 the\tcapital account\t of the assessee showed a net credit
\nbalance of  Rs. 23,80,753. Initially on November 21, 1955, a
\nsum of\tRs. 10\tlacs was  debited to her capital account and
\ncorresponding credit  was given\t to the\t account of the said
\nInstitute. At the close of the said accounting year (i.e. on
\n749<\/span>
\n1-11-1956) after  debiting the\taforesaid sum of Rs. 10 lacs
\nthe capital  account showed  a net  credit  balance  of\t Rs.
\n15,06,891. Thereafter,\tduring the  same year of account the
\nassessee actually  paid only  a sum  of Rs.  5.5 lacs to the
\ninstitution on\tJanuary 7,  1956 from  the overdraft account
\nwhich she  had with the Central Bank of India Ltd., Aligarh.
\nAt  the\t  beginning  of\t  the  accounting  year\t the  amount
\noutstanding in\tthe  overdraft\twas  Rs.  2,76,965;  further
\noverdrafts were\t raised during\tthe accounting year with the
\nresult that  at the  end of  the year  the liability  of the
\nassessee to  the bank  was Rs.\t9,55,660; among\t the further
\ndebits to  this account\t during the year was said sum of Rs.
\n5.5 lacs paid to the Engineering College on January 7, 1956.
\nThe balance  of the  promised donation, namely, Rs. 4.5 lacs
\nwas, as\t stated earlier, treated as a debt due by her to the
\nInstitute and  accordingly she\twas  debited  with  interest
\nthereon at 6% per annum with effect from October 21, 1955.\n<\/p>\n
     In the  assessment proceedings for the assessment years
\n1957-58,  1958-59  and\t1959-60\t the  assessee\tclaimed\t the
\ndeduction of  three sums-Rs.  20,107\/-, Rs. 25,470\/- and Rs.
\n18,445\/- being\tthe respective items of interest paid by her
\nto the bank on Rs. 5.5 lacs during the Samvat years relevant
\nto the\tsaid assessment\t years. The  assessee contended that
\nshe had\t preferred to  draw on\tthe overdraft account of the
\nbank for  the purpose  of paying the institution in order to
\nsave her  income earning  assets, namely,  the shares, which
\nshe would  have otherwise  been required  to dispose of and,
\ntherefore, the\tinterest paid  by her  should be allowed. As
\nregards interest on the remaining sum of Rs. 4.5 lacs (which
\nwas left  as a\tloan with  the assessee) that was debited to
\nher account,  the assessee  urged that she was also entitled
\nto claim  the same  as a permissible deduction; the claim in
\nrespect thereof,  however, was made for the assessment years
\n1958-59 and  1959-60. As  regards the three sums paid by way
\nof interest  on\t Rs.  5.5  lacs\t to  the  bank,\t the  taxing
\nauthorities took  the view that said claim for deduction was
\nnot admissible either against business income under s. 10(2)
\nor against  income from\t investments under  s. 12(2)  of the
\nIndian Income Tax Act, 1922. So also the claim for deduction
\nof interest  credited to the college account on Rs. 4.5 lacs
\nwas  disallowed.  The  assessee\t preferred  appeals  to\t the
\nAppellate Tribunal.  It\t was  contended\t on  behalf  of\t the
\nassessee that  she had promised a donation of Rs. 10 lacs to
\nthe Engineering\t College  on  October  21,  1955,  that\t the
\nobligation to pay the said amount arose on November 21, 1955
\nwhen the  amount was  debited to her capital account and the
\ncorresponding  credit  was  given  to  the  account  of\t the
\ninstitution, and  that out  of this  total donation a sum of
\nRs.5.5 lacs  was actually  deposited in the joint account of
\nthe
\n750<\/span>
\nassessee and the District Magistrate, Bulandshahr on January
\n7, 1956\t for which  the overdraft  with the Central Bank was
\noperated and  hence the\t interest was deductible as business
\nexpenditure. As\t regards interest  on Rs.  4.5 lacs that was
\ndebited to  her account\t and  credited\tto  the\t Institute’s
\naccount it  was urged  that this  balance amount was kept in
\ntrust for  the institution  and hence  the accruing interest
\nthereon which  was debited  to her account should be allowed
\nas  a\tdeduction.  In\t support  of   these  submissions  a
\ncertificate issued  by the  District Magistrate, Bulandshahr
\ndated October 17, 1958 was produced before the Tribunal. The
\nAppellate Tribunal,  however, confirmed\t the disallowance of
\ninterest claimed  in respect  of the  sum of  Rs.  5.5\tlacs
\nholding that  the said\tsum of\tRs. 5.5 lacs over-drawn from
\nthe bank  was not  borrowed for\t business purposes  but\t was
\nborrowed for  making over  the donation\t and, therefore, the
\nclaim could  not be  sustained under  s. 10(2) of the Income
\nTax Act,  1922. As  regards the interest accruing on the sum
\nof Rs.\t4.5 lacs  in favour  of the Engineering College, the
\nAppellate Tribunal  held that  no donation  of that  sum had
\nbeen made  by the assessee, that it was at best a promise by
\nthe assessee  to the  District Magistrate to pay that amount
\nfor  purpose   of  charity  and\t the  mere  entries  in\t the
\nassessee’s own\taccount book  crediting the trust, which had
\nyet to\tcome into  existence, would  not amount to a gift or
\ncharity for a trust and as such the interest credited to the
\naccount of  the Engineering  College  was  also\t disallowed.
\nMeanwhile, Smt.\t Indermani Jatia  died and  her\t legal\their
\nMadhav Prasad Jatia was substituted in the proceedings.\n<\/p>\n
     On the  question whether  the interest  on Rs. 5.5 lacs
\nwas deductible for the assessment years 1957-58, 1958-59 and
\n1959-60, the  Tribunal declined to make any reference to the
\nHigh Court, whereupon the assessee applied to the High Court
\nunder s.  66(2) and  upon the application being allowed, the
\nTribunal referred  the\tquestion  whether  interest  on\t the
\noverdraft of  Rs. 5.5  lacs-the sums  of Rs. 20,107 (for the
\nassessment year\t 1957-58), Rs.\t25,470 (for  the  assessment
\nyear 1958-59)  and Rs. 18,445 (for the assessment year 1959-\n<\/p>\n
60)-paid to  the Central  Bank was  allowable as a deduction
\nunder s.  10(2)(iii) or\t 10(2) (xv) of the Indian Income Tax
\nAct, 1922  (being Income  Tax Reference No. 775 of 1970). As
\nregards the  deduction of  interest on\tRs. 4.5 lacs claimed
\nfor the\t assessment years  1958-59 and 1959-60, the Tribunal
\nitself made a reference to the High Court under s. 66(1) and
\nreferred for  the opinion  of the  High Court  the  question
\nwhether in  the facts  and circumstances  of  the  case\t the
\ninterest credited  by the  assessee to\tthe account of Ganga
\nSagar Jatia Engineering College on the sum of Rs. 4.5 lacs
\n751<\/span>
\nand accretion  thereto was  an admissible deduction for each
\nof the said two years (being Income Tax Reference No. 342 of
\n1964). The  High  Court\t heard\tand  disposed  of  both\t the
\nreferences by a common judgment dated September 22, 1971. In
\nthe Reference  No. 775 of 1970, the case of the assessee was
\nthat there  was an  obligation to  pay Rs.  10 lacs  to\t the
\nEngineering College,  that for\tthe time  being the assessee
\ndecided to  pay Rs.  5.5 lacs,\tthat  it  was  open  to\t the
\nassessee to  pay the  amount from  her business assets or to
\npreserve the  business assets  for the\tpurposes of  earning
\nincome and  instead borrow the amount from the bank and that
\nshe had\t accordingly borrowed  the amount from the bank and,
\ntherefore, since  the borrowing\t was made  to  preserve\t the
\nbusiness assets,  the interest\tthereon was deductible under
\ns. 10(2)  (iii) or  10(2) (xv)\tof the\tAct. The  High Court
\nobserved that  there was  nothing to  show that the assessee
\nwould necessarily have had to employ the business assets for
\nmaking payment\tof that\t amount, and  secondly, it  was only
\nwhere money  is borrowed  for the  purposes of business that
\ninterest paid thereon becomes admissible as a deduction, and
\nsince, in  the instant\tcase, the  sum of  Rs. 4.4  lacs was
\nadmittedly borrowed  from the Bank for making payment to the
\nEngineering College  it was  not a  payment directed  to the
\nbusiness purposes.  According to  the High  Court  the\tmere
\ncircumstance that  otherwise  the  assessee  would  have  to
\nresort to  the liquidation  of\ther  income-yielding  assets
\nwould not  stamp the  interest paid  on such borrowings with
\nthe character  of business  expenditure. After\treferring to
\nthe decisions  one of  the Bombay High Court in Bai Bhuriben
\nLallubhai v.  Commissioner of Income-Tax, Bombay North Cutch
\nand Saurashtra\tand the\t other of the Calcutta High Court in
\nMannalal Ratanlal  v. Commissioner  of Income-Tax  Calcutta,
\nthe High  Court rejected  the contention of the assessee and
\nheld that  interest paid on Rs. 5.5 lacs in any of the years
\nwas not deductible either under s. 10(2) (iii) or 10(2) (xv)
\nof the\tAct and answered the questions against the assessee.
\nAs regards  the\t question  referred  to\t it  in\t Income\t Tax
\nReference No. 342 of 1964, the High Court took the view that
\nthere was  nothing on record before it to establish that the
\nassessee had  actually donated\tthe entire  amount of Rs. 10
\nlacs to the Engineering College, that the certificate issued
\nby the\tDistrict Magistrate, Bulandshahr on October 17, 1958
\nmerely showed  that a  balance of Rs. 4.5 lacs was left as a
\nloan with  the\tassessee  and  that  the  interest  accruing
\nthereon from  the date\tof the\tinitial donation  “was to be
\nfinally deposited in the account of the Technical Institute”
\nand that though the assessee had made
\n752<\/span>
\nentries in  her account\t books crediting  the trust with the
\ninterest on  the amount,  the trust  had not  yet come\tinto
\nexistence and  as such\tthe amount  credited represented her
\nown funds  and lay entirely within her power of disposition.
\nWith such  material on\trecord, the High Court confirmed the
\nTribunal’s view\t that Rs.  4.5 lacs  had not been donated by
\nthe  assessee\ton  October   21,  1955\t in  favour  of\t the
\nEngineering College and, therefore, the interest credited by
\nthe assessee  in favour of the Institute on the said sum and
\nthe accretion  thereto continued  to belong  to the assessee
\nand as such she was not entitled to the deduction claimed by
\nher and\t accordingly the  question was also answered against
\nthe  assessee.\tOn  obtaining  special\tleave  the  original
\nassessee represented  by her  legal heir has preferred Civil
\nAppeals Nos. 1831-1833 of 1972 to this Court.\n<\/p>\n
     Mr. Manchanda  appearing for  the appellant  has raised
\ntwo or\tthree contentions  in support of the appeals. In the
\nfirst place  he has  contended\tthat  though  the  deduction
\nclaimed by  the assessee  in this  case was  on the basis of
\nbusiness expenditure  falling under  either s. 10(2)(iii) or
\n10(2)(xv), the taxing authorities, the Tribunal and the High
\nCourt have  confused the  issue by considering the claim for
\ndeduction under\t s. 12(2)  of the  Act. According to him the
\nscope for  allowing the\t deduction under  s.  10(2)(iii)  or
\n10(2)(xv) was  much wider than under s. 12(2) of the Act. He
\nurged  that  by\t applying  the\tratio  of  the\tdecision  in
\nBhuriben’s case (supra), which was admittedly under s. 12(2)
\nof the\tAct, to\t the facts  of the  instant case  the  lower
\nauthorities as\twell as\t the High  Court had adopted a wrong
\napproach which\tled to\tthe  inference\tthat  the  deduction
\nclaimed by  the assessee  was not  admissible. Secondly,  he
\nurged that  considering the  case under\t s. 10(2)  (iii)  or
\n10(2) (xv) the question was when could the obligation to pay
\nRs. 10\tlacs to the Engineering College be said to have been
\nincurred  by   the  assessee   and  according  to  him\tsuch
\nobligation arose  as  soon  as\tthe  donation  or  gift\t was
\ncomplete and  in  that\tbehalf\tplacing\t reliance  upon\t the
\ncertificate dated  October 17,\t1958, issued by the District
\nMagistrate, Bulandshahr,  as well as the entries made by the
\nassessee in  her books,\t he urged that the gift was complete
\nno sooner  the capital\taccount of  the assessee was debited
\nand the\t college account  was credited\twith the said sum of
\nRs. 10\tlacs on\t November  21,\t1955,  especially  when\t her
\ncapital account\t had a credit balance of Rs. 15,06,891 after
\ngiving\tthe   debit  of\t  Rs.  10  lacs;  the  gift  in\t the
\ncircumstances would,  according to  him, be complete then as
\nper decided cases such as Gopal Raj Swarup v.\n<\/p>\n
753<\/span><\/p>\n
Commissioner of\t Wealth-Tax, Lucknow Naunihal Thakar Dass v.
\nCommissioner of\t Income-Tax, Punjab.  He further  urged that
\nthough the  sum of  Rs. 5.5  lacs was  actually paid  by the
\nassessee by borrowing the amount on January 7, 1956 from the
\noverdraft account  with the  Central Bank  of India Ltd. the
\nsaid overdraft was a running overdraft account opened by her
\nfor business purposes and if from such overdraft account any
\nborrowing was  made interest  thereon  would  be  deductible
\nunder s.  10(2)(iii) or\t 10(2)\t(xv)  as  being\t expenditure
\nincurred for the purposes of the business. According to him,
\nonce a\tborrowing was  made from  an overdraft account meant
\nfor business  purposes, the  ultimate  utilization  of\tthat
\nborrowing will\tnot affect  the question of deductibility of
\ninterest paid  on such\tborrowing under\t s. 10(2)  (iii)  or
\n10(2) (xv)  and in  that behalf\t he placed reliance upon two
\ndecisions of  the Bombay High Court, namely, Commissioner of
\nIncome-Tax, Bombay  City II  v. Bombay Samachar Ltd., Bombay
\nand  Commissioner   of\tIncome\t Tax,  Bombay\tCity-IV<\/a>\t  v.
\nKishinchand Chellaram.\tHe, therefore,\turged that  the High
\nCourt had erred in sustaining the disallowance in respect of
\ninterest paid by the assessee on Rs. 5.5 lacs to the Bank in
\nthe three  years in  question as  also the  disallowance  in
\nregard to  the interest\t credited by  the  assessee  to\t the
\naccount of  the Engineering  College in\t the  two  years  in
\nquestion on  the sum  of Rs.  4.5  lacs\t and  the  accretion
\nthereto.\n<\/p>\n
     On the  other hand, Mr. Desai for the Revenue, disputed
\nthat there  was any confusion of the issue or that any wrong
\napproach had been adopted by the lower authorities or by the
\nHigh  Court   as  suggested   by  learned  counsel  for\t the
\nappellant. He  pointed out  that initially  the assessee had
\nspecifically raised  the plea  that the borrowing of Rs. 5.5
\nlacs had  been resorted\t to with  a  view  to  save  income-
\nyielding investments,  namely, the  shares  and,  therefore,
\nboth the  alternative cases  as to whether the interest paid
\non Rs.\t5.5 lacs  was an admissible deduction either against
\nbusiness  income   under  s.  10(2)  (iii)  or\tincome\tfrom
\ninvestments under  s. 12(2)  were considered  by the  taxing
\nauthorities  and  the  taxing  authorities  held  that\tsuch
\ninterest was  not admissible under either of the provisions.
\nHe pointed  out that  so far  as the  Tribunal and  the High
\nCourt were  concerned the  assessee’s  claim  for  deduction
\nunder s.  10(2) (iii)  or 10(2)\t (xv) had  been specifically
\nconsidered and\tnegatived. He  sought to justify the view of
\nthe  Tribunal\tand  the   High\t Court\t in  regard  to\t the
\ndisallowance of interest paid by
\n754<\/span>
\nthe assessee  on the  sum of Rs. 5.5 lacs to the Bank in the
\nthree concerned assessment years as also the disallowance of
\ninterest credited  by the  assessee to\tthe account  of\t the
\nEngineering College  on the  sum of  Rs. 4.5  lacs  and\t the
\naccretion thereto;  as regards\tthe sum\t of Rs.\t 5.5 lacs he
\ncontended that\tthe real  question was\tnot as\tto when\t the
\nobligation to  pay  to\tthe  college  was  incurred  by\t the
\nassessee but whether the obligation incurred by the assessee
\nwas her\t personal obligation  or a  business obligation\t and
\nwhether the expenditure by way of payment of interest to the
\nBank was  incurred for\tthe purpose  of carrying on business
\nand as\tregards the sum of Rs. 4.5 lacs whether the trust in
\nfavour of  the college\thad at\tall come  into existence  on
\nOctober 21,  1955 or  November 21,  1955 as contended for by
\nthe assessee  and on  both the\tquestions the  view  of\t the
\nTribunal and  the High\tCourt was  right. As regards the two
\nBombay decisions,  namely Bombay Samachar’s case (supra) and
\nKishinchand Chellaram’s\t case (supra),\the  urged  that\t the
\nratio of the decisions was inapplicable to the instant case.\n<\/p>\n
     At the  outset we would like to say that we do not find
\nany substance  in the  contention of learned counsel for the
\nappellant that\tthere has been any confusion of the issue or
\nthat any  wrong approach  has been  adopted  by\t the  taxing
\nauthorities, the  Tribunal or  the High\t Court. After  going
\nthrough the  Tribunal’s order as well as the judgment of the
\nHigh Court  we are  clearly of the view that the case of the
\nassessee has been considered both by the Tribunal as well as
\nby the High Court under s. 10(2) (iii) or 10(2) (xv) and not
\nunder s.  12(2). In  fact, in  Reference No. 775 of 1970 the
\nquestions framed  by the  Tribunal in  terms referred  to s.
\n10(2)(iii) and\t10(2) (xv)  and proceeded  to seek  the High
\nCourt’s opinion as to whether the sums representing interest
\npaid by the assessee to the Central Bank on the overdraft of
\nRs. 5.5 lacs for the concerned three years were allowable as
\na deduction  under either  of the said provisions of the Act
\nand the\t High Court  after considering\tthe matter  and\t the
\nauthorities on\tthe point  has come  to the  conclusion that
\nsuch interest  was not allowable as a deduction under either
\nof the\tsaid provisions\t It is\ttrue that the High Court did
\nrefer to  the decision\tof the\tBombay\tHigh  Court  in\t Bai
\nBhuriben’s case\t (supra) but  that decision  was referred to
\nonly for  the purpose  of emphasizing  one aspect  which was
\npropounded by that Court, namely, that the motive with which
\nan assessee  could be  said to have made the borrowing would
\nbe irrelevant  and that\t simply because the assessee in that
\ncase had  chosen to borrow money to buy jewellery it did not
\nfollow that  she had  established the purpose required to be
\nproved under  s. 12(2)\tthat she borrowed the money in order
\nto maintain  or preserve the fixed deposits or helped her to
\nearn interest. This is far from say-\n<\/p>\n
755<\/span><\/p>\n
ing that the ratio of that case has been applied by the High
\nCourt to  the instant  case. In\t fact, the  High Court found
\nthat there  was no material to show that the assessee in the
\ninstant case  would  necessarily  have\thad  to\t employ\t the
\nbusiness assets\t for making  payment to\t charity.  The\tHigh
\nCourt actually considered the assessee’s case under s. 10(2)\n<\/p>\n
(iii) and  10(2) (xv) and disallowed the claim for deduction
\nunder these  provisions principally  on the  ground that the
\nsaid borrowing of Rs. 5.5 lacs was unrelated to the business
\nof the assessee.\n<\/p>\n
     Proceeding to  consider the claim for deduction made by
\nthe assessee  under s. 10(2)(iii) or 10(2)(xv), we may point
\nout that  under s. 10(2) (iii) three conditions are required
\nto be  satisfied in  order to enable the assessee to claim a
\ndeduction  in  respect\tof  interest  on  borrowed  capital,
\nnamely, (a)  that money (capital) must have been borrowed by
\nthe assessee,  (b) that\t it must  have been borrowed for the
\npurpose of business and (c) that the assessee must have paid
\ninterest on  the said  amount and claimed it as a deduction.
\nAs regards the claim for deduction in respect of expenditure
\nunder s.  10(2)(xv), the  assessee must\t also satisfy  three
\nconditions, namely,  (a) it (the expenditure) must not be an
\nallowance of  the nature  described in clauses (i) to (xiv),\n<\/p>\n
(b) it\tmust not  be in the nature of capital expenditure or
\npersonal expenses  of the assessee and (c) it must have been
\nlaid out  or expended wholly and exclusively for the purpose
\nof his\tbusiness. It  cannot be disputed that the expression
\n“for the purpose of business” occurring in s. 10(2) (iii) as
\nalso in\t 10(2) (xv)  is wider  in scope\t than the expression
\n“for  the  purpose  of\tearning\t income\t profits  or  gains”
\noccurring in  s. 12(2)\tof the Act and, therefore, the scope
\nfor allowing  a deduction under s. 10(2) (iii) or 10(2) (xv)
\nwould be much wider than the one available under s. 12(2) of
\nthe Act.  This Court  in the  case of Commissioner of Income
\nTax, Kerala  v. Malayalam Plantations Ltd<\/a> has explained that
\nthe former  expression\toccurring  in  s.  10(2)  (iii)\t and
\n10(2)(xv), its\trange being  wide, may\ttake in not only the
\nday-to-day   running\tof   a\t business   but\t  also\t the
\nrationalisation of  its administration\tand modernisation of
\nits machinery;\tit may include measures for the preservation
\nof the\tbusiness and  for the  protection of  its assets and
\nproperty from  expropriation, coercive\tprocess or assertion
\nof  hostile   title,  it  may  also  comprehend\t payment  of
\nstatutory dues\tand taxes  imposed  as\ta  pre-condition  to
\ncommence or  for the  carrying on  of  a  business;  it\t may
\ncomprehend many\t other acts incidental to the carrying on of
\nthe business but, however wide the meaning of the expression
\nmay be,\t its limits are implicit in it; the purpose shall be
\nfor  the   purposes,  of  business,  that  is  to  say,\t the
\nexpenditure incurred shall be
\n756<\/span>
\nfor the\t carrying on  of the business and the assessee shall
\nincur it  in his  capacity  as\ta  person  carrying  on\t the
\nbusiness.\n<\/p>\n
     So far  as the  claim for deduction of interest paid by
\nthe assessee  on the  sum of  Rs.5.5 lacs to the Bank in the
\nthree concerned\t years is  concerned, the real question that
\narises for determination is whether the particular borrowing
\nof Rs.\t5.5 lacs  was for  the purposes\t of business  of the
\nassessee or  not? The  amount of  Rs. 5.5  lacs having\tbeen
\nactually parted with by the assessee on January 7, 1956, and
\nhaving\tbeen  accepted\tby  the\t institute  the\t same  being
\ndeposited in  the joint\t account of  the  assessee  and\t the
\nDistrict  Magistrate,\tBulandshahr  for   the\t Engineering
\nCollege, the  gift to  that extent  was undoubtedly complete
\nwith effect from the said date. The said payment was made by
\nthe assessee  by drawing  a cheque  on the overdraft account
\nwhich she had with the Central Bank of Indian Ltd., Aligarh.
\nIn regard  to this  overdraft account the Tribunal has noted
\nthat at\t the beginning\tof the\taccounting year\t the  amount
\noutstanding in\tthe said  over-draft was  Rs. 2,76,965, that
\nfurther overdrafts  were raised\t during the  accounting year
\nwith the  result that  at the end of the year the assessee’s
\nliability to  the bank\tin the\tsaid  account  rose  to\t Rs.
\n9,56,660 and  that among  the further debits to this account
\nduring the  year was  said sum\tof Rs.\t5.5 lacs paid to the
\ncollege on  January 7,\t1956.  On  a  consideration  of\t the
\naforesaid position  of the  overdraft and the other material
\non record, the Tribunal has recorded a clear finding of fact
\nwhich has  been accepted  by the  High Court  that the\tsaid
\nborrowing of Rs. 5.5 lacs made by the assessee from the Bank
\non January  7, 1956  had nothing  to do with the business of
\nthe assessee  but the  amount was  directly made over to the
\ncollege in  part fulfilment  of the promised donation of Rs.
\n10 lacs\t with a\t view  to  commemorate\tthe  memory  of\t her
\ndeceased husband  after whom the college was to be named. In
\nother words  the borrowing  was made  to meet  her  personal
\nobligation and\tnot the\t obligation of\tthe business  and as
\nsuch expenditure  incurred by the assessee by way of payment
\nof interest thereon was not for carrying on the business nor
\nin her\tcapacity as a person carrying on that business. Such
\nexpenditure can\t by no stretch of imagination be regarded as
\nbusiness expenditure.  It is true that initially on November
\n21, 1955 the capital account of the assessee was debited and
\nthe college account was credited with the sum of Rs. 10 lacs
\nin the books of the assessee but in our view making of these
\nentries\t in   the  assessee’s  books  would  not  alter\t the
\ncharacter of  the borrowing  nor would the said borrowing be
\nimpressed with\tthe character  of business expenditure, for,
\nadmittedly, the\t assessee maintained  only one common set of
\nbooks in  which were  incorporated entries pertaining to her
\ncapital, assets\t and income  from all her different sources.
\nIt is,\ttherefore, clear  to us\t that the  interest that was
\npaid on the sum
\n757<\/span>
\nof Rs.\t5.5 lacs  to the  bank by the assessee for the three
\nconcerned years was rightly held to be not deductible either
\nunder s. 10(2)(iii) or under s. 10(2) (xv) of the Act.\n<\/p>\n
     The two  Bombay decisions\ton which reliance was placed
\nby the\tcounsel for the appellant, namely, Bombay Samachar’s
\ncase (supra)  and Kishinchand  Chellaram’s case\t (supra) are
\nclearly distinguishable and do not touch the issue raised in
\nthe instant case before us. In the former case, the assessee
\nhad during  the relevant  assessment years  paid amounts  of
\ninterest on  capital which  was borrowed  from outsiders and
\nhad claimed  deduction in  respect of  such interest. It was
\nnot disputed  that the capital borrowed by the assessee from
\nthe outsiders  was admittedly  used by\tthe assessee for the
\npurpose of  its business.  The taxing  authorities had taken
\nthe view  that if  the assessee\t had collected\toutstandings
\nwhich were  due to it from others it would have been able to
\nreduce its  indebtedness and  save a  part of  the  interest
\nwhich it had to pay on its own borrowings, that the assessee
\ncould not  be justified\t in  allowing  its  outstandings  to
\nremain without\tcharging any  interest thereon\twhile it was
\npaying interest\t on the\t amounts borrowed by it, and that to
\nthe extent  to which  it would\thave been  in a\t position to
\ncollect interest  on the outstandings due to it from others,
\nit could  not be permitted to claim as an allowance interest
\npaid by\t it to\toutsiders. The\tHigh Court  held that such a
\nview was  clearly unsustainable\t and observed that it is not
\nthe requirement\t under s. 10(2) (iii) that the assessee must
\nfurther show that the borrowing of the capital was necessary
\nfor the business so that if at the time of the borrowing the
\nassessee has  sufficient amount\t of its\t own  the  deduction
\ncould not  be allowed  and the\tHigh Court  further took the
\nview that  in  deciding\t whether  a  claim  of\tinterest  on
\nborrowing can  be allowed  the fact  that the  assessee\t had
\nample resources its disposal and need not have borrowed, was
\nnot a  relevant matter\tfor consideration.  The decision  in
\nKishinchand Chellaram’s\t case (supra)  was rendered  in\t the
\npeculiar facts which obtained in that case. The Tribunal had
\nrecorded a  clear finding  that since  the business  of\t the
\nassessee was  that of  banking there was no borrowal as such
\nbut only  acceptance of\t deposits by  the assessee  from its
\nclients which were made by the assessee in the course of and
\nfor the purposes of its business. In those circumstances the
\nTribunal took  the view\t that the  aspect as  to  how  these
\ndeposits, which\t were admittedly  received by  the  assessee
\nfrom the  depositors in\t the course of its banking business,
\nwere subsequently  utilized would  not be  material for\t the
\npurpose of  deciding the  question whether  interest paid by
\nthe assessee  on these\tdeposits should\t be allowed under s.
\n10(2) (xv)  of\tthe  Act  and  the  High  Court\t refused  to
\ninterfere with\tthat view  of the  Tribunal and rejected the
\nRevenue’s application for a Reference. In the instant
\n758<\/span>
\ncase admittedly\t the borrowing of Rs. 5.5 lacs had been made
\nby the\tassessee to meet her personal obligation and not the
\nobligation of  her business.  The borrowing  was  completely
\nunrelated to  the purpose  of the  business and was actually
\nused for  making charity.  On these  facts it  will be clear
\nthat the  interest paid\t on such borrowing cannot be allowed
\nas deduction either under s. 10(2) (iii) or 10(2) (xv).\n<\/p>\n
     Turning to\t the question  of interest  credited by\t the
\nassessee during\t the assessment years 1958-59 and 1959-60 to
\nthe account of the Engineering College on the sum of Rs. 4.5
\nlacs and  the accretion thereto the real question is whether
\nthe gift  or donation  of Rs.  4.5 lacs\t was complete  and a
\ntrust of  that amount  came into  existence in favour of the
\ncollege as  has been contended for by the assessee. The only
\nmaterial on  which reliance  has been placed by the assessee
\nin  this   behalf  consists  of\t the  entries  made  in\t the
\nassessee’s books  of  accounts\tand  the  certificate  dated
\nOctober\t 17,   1958  issued   by  the  District\t Magistrate,
\nBulandshahr but\t from this  material it is difficult to draw
\nthe inference suggested by the counsel for the appellant. In
\nour view  both the  Tribunal as\t well as the High Court were
\nright in  taking the view that the certificate dated October
\n17, 1958  was of  no avail  to the  assessee inasmuch  as it
\nmerely stated  that the\t assessee had promised a donation of
\nRs. 10\tlacs on\t October 21, 1955, out of which Rs. 5.5 lacs
\nwere deposited\tin the\tjoint account maintained in the name
\nof the assessee and the District Magistrate, Bulandshahr for
\nthe college  and the  remaining sum of Rs. 4.5 lacs was left
\nas a  loan with\t the assessee and interest thereon at 6% per
\nannum was to be finally deposited in the Technical Institute
\naccount. The  Tribunal and the High Court were also right in
\ntaking the  view that  beyond making entries in the books of
\naccount of  the assessee  there was no material on record to
\nshow that  the assessee\t had actually made over a sum of Rs.
\n4.5 lacs to the college or that the college had accepted the
\nsaid donation  with the\t result that  the amount credited to
\nthe college  account in\t her books represented her own funds
\nand lay\t entirely within  her power  of disposition and that
\nbeing so,  the interest credited by the assessee on the said
\nsum of\tRs. 4.5\t lacs and the accretion thereto continued to
\nbelong to the assessee, and, therefore, she was not entitled
\nto the\tdeduction in  respect of such interests. Counsel for
\nthe assessee  attempted to  contend that  the obligation  to
\nmake over the said sum of Rs. 4.5 lacs could be said to have
\nbecome enforceable  on the  basis of promissory estoppel but
\nin our\tview, no  material has\tbeen placed on record by the
\nassessee to  show that\tacting on  the promised donation the
\ncollege authorities  had actually  incurred any\t expenditure
\ntowards construction  or acted to their prejudice during the
\naccounting period  relevant to\tthe assessment years 1958-59
\nand 1959-60 so as
\n759<\/span>
\nto support the plea of promissory estoppel. Of course, if in
\nany subsequent\tyears the assessee is in a position to place
\nany material  before the  taxing authorities or the Tribunal
\nor the\tCourt which  would support  the plea  of  promissory
\nestoppel the  position in such years may be different. It is
\nthus obvious  that if  no trust\t in favour of the college in
\nregard to  the amount  of Rs. 4.5 lacs could be said to have
\ncome into  existence  either  on  October  21,\t1955  or  on
\nNovember 21, 1955 or on any other subsequent date during the
\nrelevant years, no deduction in respect of interest credited
\nby the\tassessee to the account of the college over the said
\nsum can be allowed.\n<\/p>\n
     In the  circumstances, in\tour  view,  the\t High  Court
\nrightly answered  the questions\t referred to  it against the
\nassessee in both the references. The appeals are accordingly
\ndismissed with costs.\n<\/p>\n
V.D.K.\t\t\t\t\t  Appeals dismissed.\n760<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., … on 17 April, 1979 Equivalent citations: 1979 AIR 1291, 1979 SCR (3) 745 Author: V Tulzapurkar Bench: Tulzapurkar, V.D. PETITIONER: MADHAV PRASAD JATIA Vs. RESPONDENT: COMMISSIONER OF INCOME TAX, U.P., LUCKNOW DATE OF JUDGMENT17\/04\/1979 BENCH: TULZAPURKAR, V.D. BENCH: TULZAPURKAR, V.D. BHAGWATI, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-34734","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nMadhav Prasad Jatia vs Commissioner Of Income Tax, U.P., ... on 17 April, 1979 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., ... on 17 April, 1979 - Free Judgements of Supreme Court & High Court | Legal India\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979\" \/>\n<meta property=\"og:site_name\" content=\"Free Judgements of Supreme Court & High Court | Legal India\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LegalindiaCom\/\" \/>\n<meta property=\"article:published_time\" content=\"1979-04-16T18:30:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2015-04-14T15:14:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg?fit=512%2C512&ssl=1\" \/>\n\t<meta property=\"og:image:width\" content=\"512\" \/>\n\t<meta property=\"og:image:height\" content=\"512\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Legal India Admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@legaliadmin\" \/>\n<meta name=\"twitter:site\" content=\"@Legal_india\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Legal India Admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"35 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979\"},\"author\":{\"name\":\"Legal India Admin\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/person\\\/0bfdffe9059fb8bb24a86d094609c5ea\"},\"headline\":\"Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., … on 17 April, 1979\",\"datePublished\":\"1979-04-16T18:30:00+00:00\",\"dateModified\":\"2015-04-14T15:14:07+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979\"},\"wordCount\":5364,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\"},\"articleSection\":[\"Supreme Court of India\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979\",\"name\":\"Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., ... on 17 April, 1979 - Free Judgements of Supreme Court & High Court | Legal India\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#website\"},\"datePublished\":\"1979-04-16T18:30:00+00:00\",\"dateModified\":\"2015-04-14T15:14:07+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., … on 17 April, 1979\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#website\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\",\"name\":\"Free Judgements of Supreme Court & High Court | Legal India\",\"description\":\"Search and read the latest judgements, orders, and rulings from the Supreme Court of India and all High Courts. A comprehensive database for lawyers, advocates, and law students.\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\"},\"alternateName\":\"Free judgements of Supreme Court & High Court of India | Legal India\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\",\"name\":\"Judgements of Supreme Court & High Court | Legal India\",\"alternateName\":\"Legal India\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/wp-content\\\/uploads\\\/sites\\\/5\\\/2025\\\/09\\\/legal-india-icon.jpg\",\"contentUrl\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/wp-content\\\/uploads\\\/sites\\\/5\\\/2025\\\/09\\\/legal-india-icon.jpg\",\"width\":512,\"height\":512,\"caption\":\"Judgements of Supreme Court & High Court | Legal India\"},\"image\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.facebook.com\\\/LegalindiaCom\\\/\",\"https:\\\/\\\/x.com\\\/Legal_india\"]},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/person\\\/0bfdffe9059fb8bb24a86d094609c5ea\",\"name\":\"Legal India Admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"caption\":\"Legal India Admin\"},\"sameAs\":[\"https:\\\/\\\/www.legalindia.com\",\"https:\\\/\\\/x.com\\\/legaliadmin\"],\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/author\\\/legal-india-admin\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., ... on 17 April, 1979 - Free Judgements of Supreme Court & High Court | Legal India","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979","og_locale":"en_US","og_type":"article","og_title":"Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., ... on 17 April, 1979 - Free Judgements of Supreme Court & High Court | Legal India","og_url":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979","og_site_name":"Free Judgements of Supreme Court & High Court | Legal India","article_publisher":"https:\/\/www.facebook.com\/LegalindiaCom\/","article_published_time":"1979-04-16T18:30:00+00:00","article_modified_time":"2015-04-14T15:14:07+00:00","og_image":[{"width":512,"height":512,"url":"https:\/\/i0.wp.com\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg?fit=512%2C512&ssl=1","type":"image\/jpeg"}],"author":"Legal India Admin","twitter_card":"summary_large_image","twitter_creator":"@legaliadmin","twitter_site":"@Legal_india","twitter_misc":{"Written by":"Legal India Admin","Est. reading time":"35 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979#article","isPartOf":{"@id":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979"},"author":{"name":"Legal India Admin","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea"},"headline":"Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., … on 17 April, 1979","datePublished":"1979-04-16T18:30:00+00:00","dateModified":"2015-04-14T15:14:07+00:00","mainEntityOfPage":{"@id":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979"},"wordCount":5364,"commentCount":0,"publisher":{"@id":"https:\/\/www.legalindia.com\/judgments\/#organization"},"articleSection":["Supreme Court of India"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979","url":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979","name":"Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., ... on 17 April, 1979 - Free Judgements of Supreme Court & High Court | Legal India","isPartOf":{"@id":"https:\/\/www.legalindia.com\/judgments\/#website"},"datePublished":"1979-04-16T18:30:00+00:00","dateModified":"2015-04-14T15:14:07+00:00","breadcrumb":{"@id":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.legalindia.com\/judgments\/madhav-prasad-jatia-vs-commissioner-of-income-tax-u-p-on-17-april-1979#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.legalindia.com\/judgments\/"},{"@type":"ListItem","position":2,"name":"Madhav Prasad Jatia vs Commissioner Of Income Tax, U.P., … on 17 April, 1979"}]},{"@type":"WebSite","@id":"https:\/\/www.legalindia.com\/judgments\/#website","url":"https:\/\/www.legalindia.com\/judgments\/","name":"Free Judgements of Supreme Court & High Court | Legal India","description":"Search and read the latest judgements, orders, and rulings from the Supreme Court of India and all High Courts. A comprehensive database for lawyers, advocates, and law students.","publisher":{"@id":"https:\/\/www.legalindia.com\/judgments\/#organization"},"alternateName":"Free judgements of Supreme Court & High Court of India | Legal India","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.legalindia.com\/judgments\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.legalindia.com\/judgments\/#organization","name":"Judgements of Supreme Court & High Court | Legal India","alternateName":"Legal India","url":"https:\/\/www.legalindia.com\/judgments\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/","url":"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg","contentUrl":"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg","width":512,"height":512,"caption":"Judgements of Supreme Court & High Court | Legal India"},"image":{"@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/LegalindiaCom\/","https:\/\/x.com\/Legal_india"]},{"@type":"Person","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea","name":"Legal India Admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","caption":"Legal India Admin"},"sameAs":["https:\/\/www.legalindia.com","https:\/\/x.com\/legaliadmin"],"url":"https:\/\/www.legalindia.com\/judgments\/author\/legal-india-admin"}]}},"modified_by":null,"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts\/34734","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/comments?post=34734"}],"version-history":[{"count":0,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts\/34734\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/media?parent=34734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/categories?post=34734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/tags?post=34734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}