Judgement

SHAH, J. : - In computing the total earned income of the appellant Company for the calender year 1959, the Income-tax Officer, Trivandrum, disallowed a claim for deduction of Rs. 80,255 in respect of liability for payment of tax under the Wealth Tax Act 27 of 1957 incurred by the Company for the calender years 1957 and 1958. The order was confirmed by the Appellate Assistant Commissioner and by the Appellate Tribunal. On the following question referred by the Wealth Tax Appellate Tribunal,

"Whether on the facts and circumstances of the case, the assessee Company is entitled to a deduction of Rs. 12,873 being the wealth tax paid during the account year ended 29-2-1960, against the profits and gains of its business for the assessment year 1960-61 under Sec. 10(2)(xv) of the Indian Income-tax Act?"

the High Court of Kerala recorded an answer in the negative. The Company has appealed to this Court with special leave.

2. The Company claims that wealth-tax paid by it represented expenditure laid out wholly and exclusively for the purpose of its business, and on that account is a permissible allowance under S. 10 (2)(xv) of the Income-tax Act. In determining the admissibility of thi