S. C. DEB, S. M. GUHA, JJ. ( 1 ) THIS is a Reference under section 256 (1) of the Income Tax Act, 1961. The assessment year is 1872-73. The previous year ends on December 31, 1971. The question before us runs thus:"whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the payment of interest of Rs. 28,488/- on money borrowed for payment of income-tax was not an expenditure laid out wholly and exclusively for the purpose of business as contemplated by sub-section (1) of section 37 of the Income-tax Act, 1961 ?"the assessee is a company. The company had an overdraft account with a bank and utilized this account for payment of income-tax and claimed the proportionate interest paid on the said amount as an allowable expenditure under section 37 (1) of the Income-tax Act, 1961 (hereinafter referred to as the Act ). ( 2 ) THE Income-tax Officer disallowed the claim. The appeals filed by the assessee were dismissed by both the Appellate Authorities by following the case of (1) Mannalal Ratanlal v. Commissioner of Income-tax, 58 ITR 182. ( 3 ) S. P. Mitra, J. , (as he then was) speaking for this Court in the aforesaid case, held that the interest paid on a borrowed amount for payment of income-tax is not a deductible expenditure under Section 10 (2) (xv) of the Indian Income-tax Act, 1922. ( 4 ) MR. Kalyan Ray, learned counsel for the assessee, argues before us that the aforesaid case was wrongly decided by this Court in view of the following decisions of the Supreme Court: (2) Commissioner of Income Tax, Bombay North v. Chandulal Keshavlal and Co. , 38 ITR 601; (3) Commissioner of Income Tax, Kerala v. Malayalam Plantations Ltd. 53 ITR 140; (4) Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth Tax (Central), Cal. 59 ITR 767; (5) Travancore Titantium Product Ltd. v. Commissioner of Income Tax, Kerala, 60 ITR 277; (6) Shree Minakshi Mills Ltd. v. Commissioner of Income Tax, Mad. 63 ITR 207; (7) Commissioner of Income Tax, West Bengal v. Birla Cotton Spg. and Wvg. Mills Ltd. , 82 ITR 166; and (8) Indian Aluminium Co. Ltd. v. Commissioner of Income Tax, W. B. , 84 ITR 735. 63 ITR 207; (7) Commissioner of Income Tax, West Bengal v. Birla Cotton Spg. and Wvg. Mills Ltd. , 82 ITR 166; and (8) Indian Aluminium Co. Ltd. v. Commissioner of Income Tax, W. B. , 84 ITR 735. ( 5 ) IN the case of (4) Kesoram Industries and Cotton Mills Ltd. , (supra), the assessee was a company and therefore Mr. Ray argues that in this case the Supreme Court has held that ?the income-tax liability of a company is a trading debt?. But we reject it as the Supreme Court has not said so and we must not misread it, as rightly said by Mr. Ajit Sengupta, learned counsel for the Revenue. ( 6 ) NOW, in (3) Malayalam Plantations Ltd. (supra), at page 150 of the Report, the Supreme Court says this:"the expression 'for the purpose of the business 'is wider in scope than the expression, for the purpose of earning profits'. Its range is wide; it may take in not only the day to day running of a business but also the rationalization of its administration and modernization of its machinery; it may include measures for the preservation of the business and for the protection of its assets and property from expropriation, coercive, process or assertion of hostile title; it may also comprehend payment of statutory dues and taxes imposed as a pre-condition to commence or for carrying on of a business; it may comprehend many other acts incidental to the carrying on of its business. " ( 7 ) MR. Ray picks up the words ?it may also comprehend payment of statutory dues and taxes? and argues that the expression ?for the purpose of the business? is wide enough to include payment of income-tax, but we reject it, for the payment of income-tax is not a pre-condition either for commencing or for carrying on of a business. ( 8 ) MR. Ray then cites and cases of (2) Chandulal Keshavlal, (supra), (5) Travancore Titanium Product Ltd. , (supra) and (8) Indian Aluminium Co. Ltd. (supra), and argues that on the ground of commercial expediency, trading principles and commercial practice it should be held that the interest paid by the assessee on the borrowed money for the payment of income-tax is an expenditure incidental to the business of the assesssee and as such it is a deductible expenditure under section 37 (1) of the Act. He also places strong reliance on the case of (7) Birla Cotton Spinning And Weaving Mills Ltd. , (supra) at p. 172 of the Report, where the Supreme Court says this:"it must be remembered that the earning of profits and the payment of taxes are not isolated and independent activities of a business. These activities are continuous and take place from year to year during the whole period for which the business continues. "he argues that the payment of income-tax is a business activity of a trader and that even if an expenditure is not directly related to the earning of income it may still be regarded as an admissible deduction as observed by the Supreme Court in the case of Meenakshi Mills Ltd. , (supra), at p. 213 of the Report. ( 9 ) NOW, in the case of (7) Birla Cotton Spinning And Weaving Mills Ltd. , (supra), assessments for certain assessment years had already become final and investigation proceedings were started against the assessee regarding those assessment years. If the result of the said investigations went against the assessee its business would have been totally annihilated in as much the assessee would have been liable to pay a huge tax for those assessment years. In those circumstances, the assessee had to incur law charges and expenses to fight out the said investigation and claimed those amounts as deductible expenditure. The Supreme Court held that those amounts were deductible expenditure because the assessee had to incur those expenditure for the purpose of protection and preservation of its business. ( 10 ) MR. Ray also fails to notice that the Supreme Court has used the expression ? the earning of profits? and not the expression ?for the purpose of business? in its aforesaid dictum which was made on a different context and has no bearing on the question in this Reference before us. Similarly, the aforesaid decisions of the Supreme Court cited by him were decided on different facts and they do not apply to the case in hand. ( 11 ) IT is a settled law that expression ?for the purpose of a business? is wider in scope than the expression ?for the purpose of earning profit?. Similarly, the aforesaid decisions of the Supreme Court cited by him were decided on different facts and they do not apply to the case in hand. ( 11 ) IT is a settled law that expression ?for the purpose of a business? is wider in scope than the expression ?for the purpose of earning profit?. It is also a settled law that an expenditure cannot be allowed as a business expenditure under Section 37 (1) of the Act unless it was incurred or laid out directly or indirectly by an assessee wholly and exclusively for the purpose of his business. ( 12 ) A trader carries on the business for the purpose of earning profits and not for the purposes of paying the income-tax. No business is ever carried on, nor can it be carried on with the object of paying the income-tax. Though ?the earning of profits and the payment of taxes are not isolated and independent activities of a business?, it cannot be said that the expenditure incurred or laid out for the purpose of the payment of income-tax should fall within the scope of the expression ?for the purpose of the business?. ( 13 ) IN (9) Aruna Mills Ltd. v. Commissioner of Income Tax, Ahmedabad 31 ITR 153, the Bombay High Court has rejected the claim for deduction of interest paid under Section 18a (7) of the Indian Income-tax Act, 1922 with an observation that it ?is difficult to understand how, when a businessman commits default in discharging his statutory obligation, the consequence of that default could constitute an expenditure exclusively made for the purpose of his business. ? ( 14 ) MR. Ray disputes the correctness of the aforesaid observation and argues that the payment of income-tax should be held to be business expenditure on commercial principles or on the ground of commercial expediency. In support of his contention he places reliance on clause 3 of item (vi) of Schedule VI of the Companies Act, 1956 and argues that the amount of income-tax payable by a company must be debited to the profit and loss account and therefore in determining the trading profits of a company the amount of income-tax is a proper charge. In support of his contention he places reliance on clause 3 of item (vi) of Schedule VI of the Companies Act, 1956 and argues that the amount of income-tax payable by a company must be debited to the profit and loss account and therefore in determining the trading profits of a company the amount of income-tax is a proper charge. But there is no merits in his contention in view of item (h) of clause (x) of the aforesaid Schedule which specifically provides that the taxes on income can not be included in the profit and loss account. ( 15 ) IN (10) Maharajadhiraj Sir Kameswar Singh v. Commissioner of Income-tax, Patna, 42 ITR 774, Ramaswami C. J. , at page 778 speaking for the Patna High Court says that ?a deduction of interest on money borrowed for payment of tax is not a legitimate deduction?. At page 779 of the Report his lordship further says : ?nor can the interest payable by the assessee be claimed as business expenditure under section 10 (2) (xv) of the Indian Income-tax Act, 1922?. ( 16 ) THIS Court in the case of (1) Mannalal Ratanlal, (supra) has followed the aforesaid decision of the Patna High Court. The case of Mannalal Ratanlal (supra), has been followed by the Gujrat High Court in the case of (11) Commissioner of Income Tax, Gujarat v. Mrs. Indumati Ratanlal 70 ITR 353 by the Punjab High Court in case of (13) Dalmia Dadri Cement Ltd. v. Commissioner of Income Tax, 86 ITR 577, by the Allahabad High Court in the case of (14) Madhav Pd. Jatia v. Commissioner of Income Tax, U. P. 87 ITR 298, and again by the Punjab High Court in the case of (12) Commissioner of Income Tax v. Oriental Carpet Manufacturers (India) Pvt. Ltd. 90 ITR 373. ( 17 ) IN case of Birla Cotton Spinning and Weaving Mills Ltd. , (supra), the Supreme Court has approved the decision of this Court in the case of (15) Commissioner of Income-tax v. Calcutta Landing and Shipping Co. Ltd. , 77 ITR 575, in which this Court did not differ from Mannalal Ratanlal case, (Supra), and only distinguished in on facts. Ltd. , 77 ITR 575, in which this Court did not differ from Mannalal Ratanlal case, (Supra), and only distinguished in on facts. ( 18 ) IN the case of (16) Waldies Ltd. v. Commissioner of Income-tax, West Bengal III, reported in 110 ITR 577, this Court followed the case of Mannalal Ratanlal, (supra), by rejecting the same arguments made before us by Mr. Ray. ( 19 ) IN (17) Dalmia Dadri Cement Ltd. v. Commissioner of Income-tax Delhi (Central), 90 ITR 297, it was argued that the earlier case of (13) Dalmia Dadri Cement Ltd. v. Commissioner of Income-tax (supra), was wrongly decided in view of the judgment of the Supreme Court in the case of Birla Cotton Spinning and Weaving Mills Ltd. , (supra), and Mr. Ray repeats the same arguments but the Punjab and Haryana High Court rejected those arguments. And we respectfully agree with the reasons given by their lordships in rejecting those arguments. ( 20 ) FURTHER, section 40 (a) (ii) of the Act provides notwithstanding anything to the contrary in section 30 to 39, in computing the income chargeable under the head ?profits and gains of business or profession? any sum paid on account of tax levied on the profits or gains of any business or profession or assessed at a proportion of, or otherwise on the basis of, any such profits or gains shall not be deducted. Therefore no commercial principal whatsoever can make it a deductible expenditure under section 37 (1) of the Act in view of the aforesaid mandate of the law. ( 21 ) FURTHER, the provisions of section 80v, introduced with effect from April 1, 1976 by section 26 of the Taxation Laws (Amendment) Act, 1975, cannot be ignored in deciding the instant question before us. It provides that any interest paid by an assessee in the previous year on any money borrowed for the payment of tax due from him under the Act shall be deducted in computing his total income. ( 22 ) SECTION 80v applies to all assessees alike. It is also not confined to any particular source of income, nor it is based on any commercial principle or commercial expediency. ( 23 ) HENCE to accept the argument of Mr. ( 22 ) SECTION 80v applies to all assessees alike. It is also not confined to any particular source of income, nor it is based on any commercial principle or commercial expediency. ( 23 ) HENCE to accept the argument of Mr. Ray that the interest paid on money borrowed for the payment of income-tax is a deductable expenditure under section 37 (1) of the Act is to hold that with effect from April 1, 1976 an assessee whose income is taxable under section 28 of the Act is entitled to a double deduction for the same amount namely in the computation of his business or professional income and again in the computation of his total income and accordingly his contention must fail, for we are unable to impute such a lack of wisdom in the legislature. ( 24 ) HOWEVER wide may be the term ?commercial expediency?, an expenditure cannot be allowed as a business expenditure under section 37 (1) of the Act unless it is directly or indirectly incurred or laid out wholly and exclusively for the purpose of the business that is to say for the purpose of carrying on or carrying out of the business. And it is futile to argue that each and every expenditure incurred by a trader is a deductible expenditure. ( 25 ) NOW in (18) Ashton Gas Co. v. Attorney General, 1906 AC 10 at page 12 of the Report, Lord Chancellor says this: ?the income-tax is a charge upon the profits; the thing which is taxed is the profit that is made and you must ascertain what is the profit that is made before you deduct the tax - you have no right to deduct the income-tax before you ascertain what is the profit. I cannot understand how you can make the income-tax part of the expenditure. ? ( 26 ) SINCE amount paid as income-tax is not an expenditure at all, not even a business expenditure, it cannot even be argued that the interest paid by a trader on the money borrowed for the payment of income-tax is a business expenditure on any commercial principle, not even on the ground of commercial expediency. Further, the payment of income-tax or the interest paid on the borrowed money for the payment of income-tax is not at all related with the purpose and the object of the business. Further, the payment of income-tax or the interest paid on the borrowed money for the payment of income-tax is not at all related with the purpose and the object of the business. And no element of trade in its commercial sense being involved in it, the commercial principles and the commercial expediency must be left out of consideration in determining this issue. ( 27 ) MR. Ray in desperation has picked up a line or two from one or the other judgment of the Supreme Court dehorns their context as Mannalal Ratanlal case, (supra), stares at his face, but in the (20) ?privy Purse case?, AIR 1971 SC 530 , at p. 578 of the Report, Shah J. (as his lordship then was) says this:"it is difficult to regard a word, a clause or a sentence occurring in a judgment of this court, divorced from its context as containing a full exposition of the law on a question when the question did not even fall to be answered in that judgment". ( 28 ) AS already said, the instant question before us ?did not even fall to be answered in? those judgments of the Supreme Court cited by Mr. Ray and those observations have no bearing on it. Further, a ?decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not very observation found therein, nor what logically follows for the various observations made in it?, as said by Hedge, J. while speaking for the Supreme Court in the case of (19) State of Orissa v. Sudhansu Sekhar Misra, AIR 1968 SC 647 , at page 651 of the Report. ( 29 ) FOR all the aforesaid reasons we reject the arguments of Mr. Ray and answer the question in the affirmative and in favour of the Revenue without making any order as to costs. Guha, J. : i agree. Answered the question in favour of the Revenue without making any order as to cost.