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1952 (12) TMI 2 - SC - Income TaxWhether on a true construction of Section 25(4) of the Act, and on the facts stated the period the profits of which were entitled to exemption from the payment of tax is the period between 1st July, 1939, to 29th February, 1940, (a period of eight months) or the period commencing from 1st July, 1938, and ending with 29th February, 1940, (a period of 20 months)? Held that:- After a careful consideration of the different provisions of the Act relevant to this enquiry, we have reached the conclusion that the expression " end of the previous year " in sub-sections (3) and (4) of Section 25 in the context of those sub-sections means the end of an accounting year (a period of full 12 months) expiring immediately preceding the date of discontinuance or succession, (in this case 30th June, 1939). We are satisfied that Viswanatha Sastri, J., was right when he held that having regard to the object of the legislature in enacting sub-sections (3) and (4) of Section 25 and having regard to the plain language of these sub-sections, the assessee's contentions could not be upheld. We are, however, unable to subscribe to the conclusion reached by the learned Judge that the expression " previous year " in sub-sections (3) and (4) of Section 25 was co-related to the year of assessment 1940-41. We allow the appeal and hold that the answer given by the senior Judge to the question referred was wrong and that the answer given by Viswanatha Sastri, J., was the correct one.
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