TMI Blog1959 (12) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... roller bearings, taper bearings and other allied machine parts. For the purpose of payment of price of those commodities, the assessee made forward purchases of dollars and sterling through the Netherlands Trading Society Ltd. Eventually, however, the contract with Messrs. Columbia International (India) Ltd., did not materialise and the dollar and sterling purchased by the assessee could not be utilised. Messrs. Netherlands Trading Society Limited on the instruction of the assessee sold the dollars and sterling purchased by it on behalf of the assessee and as a result of the sale there was loss of ₹ 7,617-7-0 on sterling and a profit of ₹ 2,67,016-5-2 on dollars. After deducting the former from the latter, the Income-tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the assessee. The present reference in one under section 66(1) of the Income-tax Act and the question that has been referred to his court by the Tribunal is: Whether there was any material to hold that the assessee was carrying on a business which produced the profit of ₹ 2,59,399 liable to income-tax and not exempt under section 4(3)(vii) of the Act being a receipt arising from capital gains or being of a casual and nonrecurring nature not arising from business? The assessee was not satisfied with the question that has been referred to this court under section 66(1) and it has filed an application under section 66(2) for an order upon the Tribunal to refer certain other questions of law. On August 3, 1956, this court d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again, the question is of a two-fold character whether the amount is of the nature of capital gains or whether it is an income from business and not receipt of a casual and non-reassuring nature not arising from business. Dr. Pal appearing for the assessee stated before us that he did not want to argue that the amount was in the nature of capital gains, but he confined his argument to the second limb of the question and pressed before us the claim that it was not an income of the assessee arising from the business. Reliance was placed upon the fact that the import of machine parts was not in the usual course of the business of the assessee. It was argued that the import of machine parts was an attempt to carry on a new business which did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellate Assistant Commissioner was substantially the same as before the Income-tax Officer. In the memorandum of appeal before the Appellate Tribunal which has been placed before us by Dr. Pal no ground appears to have been taken to the effect that the import of hardware and merely an attempt by the assessee to start a new business which did not eventually materialise. It is now well settled by authorities, amongst which reference may be made to the decision of the Supreme Court in the case of New Jehangir Vakil Mills Ltd. v. Commissioner of Income-tax [1959] 37 I.T.R. 11 (S.C.)., that in a reference under section 66(1) of the Income-tax Act this court is not entitled to answer any question which does not arise out of the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it thinks that it can earn a profit and the further finding is that the goods in which the assessee carries on business cover a wide variety of items absolutely unconnected with one another and if during the assessment year the assessee for the first time attempted to import hardware, it was a new transaction in the course of the normal business of the assessee. The next circumstance relied upon by the Income-tax Officer is that the assessee under to keep only one set of accounts and bank accounts for its business in all classes of goods and all the receipts and expenses arising from dealings in different articles including the business of hardware were entered in the same account books. The third factor relied upon by the Income-tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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