TMI Blog1969 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Income-tax Appellate Tribunal in the affirmative and against the assessee : Whether, on the facts and circumstances of the case the receipt of Rs. 1,87,000 in the hands of the assessee is a revenue receipt and liable to income-tax? The assessee used to carry on his business under the name and style of Milkhiram Bros. He was being assessed from the year 1945-46 onwards. On October 31, 1946, he secured a contract for the purchase of approximately 1,28,499 parachutes from the Tata Aircraft Ltd. The parachutes belonged to the Government of India and the Tata Aircraft Ltd. was acting as the agent of the Government. The agreed purchase price of the parachutes was approximately Rs. 93 1/2 lakhs. The contract was entered into by mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aj Hirachand. It was registered by the income-tax authorities for the assessment year 1948-49. M/s. Pokhraj Hirachand in their assessment claimed a deduction of Rs. 3,00,000 being the payment made to the assessee under the arrangement mentioned above. The income-tax authorities disallowed the claim on the ground that it was a capital payment. The aforesaid firm appealed to the Tribunal which held that only a payment of Rs. 1,87,000 had been proved to have been made to the assessee. For the assessment year 1947-48 the Income-tax Officer reopened the assessment of the assessee under section 34 of the Income-tax Act, hereinafter called the Act , on the ground that the income of Rs. 3,00,000 had escaped assessment. The assessee contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt arrived was that the benefit of the contract which the assessee had entered into with M/s. Tata Aircraft Ltd. had been transferred by him in favour of Messrs. Pokhraj Hirachand for a consideration of Rs. 3,00,000 out of which a sum of Rs. 1,87,000 only had been found to have been actually received by the assessee. That sum, therefore, represented a receipt for transferring the benefits of the contract entered into by the assessee in the ordinary course of the business. On behalf of the assessee, who is the appellant before us, it is submitted that the sum of Rs. 1,87,000 received by him could not be regarded as income. The agreement which had been entered into by the appellant with M/s. Tata Aircraft Ltd. was a capital asset or a so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tc., were given 9 as. share in a rupee in the transaction and a partnership agreement was purported to have been entered into. But this letter merely embodied an arrangement for financing a business venture into which the appellant had entered. Ile did not have the funds and a deposit of Rs. 10 lakhs had to be made immediately. M/s. Nathumal Nihalchand, Pokhraj Hirachand and others agreed to pay that amount to M/s. Tata Aircraft Ltd. It must be remembered that it was the appellant who had entered into the contract with M/s. Tata Aircraft Ltd. in respect of the purchase of parachutes. When he agreed to accept a sum of Rs. 1,87,000 from the aforesaid persons as consideration for transferring the benefits of the contract the appellant can well ..... X X X X Extracts X X X X X X X X Extracts X X X X
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