COMMISSIONER OF INCOME-TAX, BOMBAY vs CIBA OF INDIA LTD.

The Supreme Court ruled that under Section 10(2)(xii) and Section 10(2)(xv) of the Income-tax Act, 1922, expenditures incurred for scientific research must be directly laid out by the assessee to qualify as admissible deductions. The Court held that payments made to a Swiss company for technical assistance and reimbursement of costs incurred for scientific research by another entity do not qualify as deductions under these sections, as they were not directly expended by the assessee on their own scientific research.