Sri MTT.AR.S.AR. Arunachalam Chettiar vs The Commissioner of Income Tax

Alfred Henry Lionel Leach, C.J.—The decision of this Court in Annamalai Chettiar v. Commissioner of Income Tax, Madras (1944) 1

M.L.J. 419 : 1944 ITR 254 answers the first question, and the answer is that the assessment should be made u/s 9 of the Income Tax Act.

The decision of this Court in V. Ramaswami Ayyangar and K.R. Subramania Ayyar, Receivers to the estate of late RM. AR. AR. RM.

Arunachalam Chettiar of Devakottai Vs. The Commissioner of Income Tax, , has bearing on the second question. In that case it was held that the

expenses of obtaining probate and letters of administration were not deductible. In the present case the assessee wishes to deduct the cost of

defending a suit filed by the Government of the Federated Malay States to recover from him death duty on his father''s estate. The assessee

successfully resisted the suit. He says that if he had not resisted it, the Government would have been able to seize the assets of his business in

execution of the decree. This may have been the position, but it has no bearing on the question now under discussion. The assessee was not sued

as the owner of the business. He was sued as a person representing his father''s estate, and the moneys which he expended in this litigation were

not expended wholly or exclusively for the purpose of his business. The expenditure was quite outside the business.

The answer to the question is that the sum of dollar 1,136 is not an expenditure allowable in computing the foreign business income.

The assessee will pay the Commissioner''s costs, Rs. 250.