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Case Laws
Showing 21 to 28 of 28 Records
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1953 (10) TMI 8 - SUPREME COURT
Addition - Indian State, Managing Agent - Commission - whether this whole amount was assessable and secondly whether the firm was entitled to exemption of the sum of Rs. 81,023 - Upon the first question both the learned Judges agreed that the sum of Rs. 2,20,702 was rightly assessed to tax, in that there was nothing to prevent the firm from drawing the amount from the company which stood credited in their favor It is contended that this commission accrued in what are now called "B States", but it was not brought into British India and hence it was not income which had accrued in British India - The short answer to this argument is that the business of the company was carried on in British India, that the commission earned by the firm on the profits made by the company in the States arose out of one indivisible agreement to charge the reduced commission of 5 per cent. on the profits of the company and that the managing agents had been doing the business of the agency in British India and not in the States - Appeal is dismissed
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1953 (10) TMI 7 - SUPREME COURT
Whether there is any material for the Tribunal's finding that the appellants (respondents in this case) were being assessed on cash basis in the prior years ?
Whether on the facts and in the circamstances of the case the Appellate Tribunal's finding that the sum of ₹ 2,26,850 could not be assessed for the assessment year 1942-43 is correct in law ?
Held that:- The sum had irrevocably entered the debit side of the company's account as a disbursement of managing agency commission to the firm and had been appropriated to the firm's dues and the same sum could not again be entered in a suspense account at a later date. The sum, therefore, belonged to the firm and had to be included in the computation of the profits and gains that had accrued to it unless the firm had regularly kept its accounts on a cash basis, which is not the case here. Appeal allowed.
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1953 (10) TMI 6 - SUPREME COURT
Whether in the facts and circumstances of this case, the Income-tax Appellate Tribunal was right in disallowing ₹ 2,00,000 as a deduction under Section 10(2)(xv) of the Indian Income-tax Act?
Held that:- The High Court was right in the conclusion to which it came that there was uncertainty as regards the beneficiaries and there was an absence of any obligation to grant any pension with the result that no legal and effective trust could be said to have been created and further that the provision of ₹ 2,00,000 in the accounting year 1946-47 was not an expenditure or an expenditure for the purposes of the business within the meaning of Section 10(2)(xv)of the Indian Income-tax Act. Appeal dismissed.
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1953 (10) TMI 5 - SUPREME COURT
Whether in the circumstances of the case any income arose to the assessee as a result of the transfer of shares and silver bars to the trustees ?
Whether the method employed by the Appellate Assistant Commissioner and upheld by the Appellate Tribunal in computing the assessee's income from the transfer is the proper method for computing the income ?
Held that:- Our answer to the first question is that in the circumstances of this case no income arose to the appellant as a result of the transfer of the shares and silver bars to the trustees. In view of that, the second question does not arise. Appeal allowed.
The appeal is allowed
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1953 (10) TMI 4 - SUPREME COURT
Whether the amount of ₹ 5,08,637 is a part of the ' reserves ' of the assessee company as on 1st April, 1946, within the meaning of rule 2(1) of the Rules in Schedule II to the Business Profits Tax Act?
Whether the profits of the assessee company from 1st January to 1st April, 1946, should be included in the said reserves as on 1st April, 1946?
Held that:- The nature of the amount which was nothing more than the undistributed profits of the company, remained unaltered. Thus the profits lying unutilized and not specially set apart for any purpose on the crucial date did not constitute reserves within the meaning of Schedule II, rule 2(1).The balance sheet drawn up by the assessee as showing the profits was prepared in accordance with the provisions of the Indian Companies Act. These provisions also support the conclusion as to what is the true nature of a reserve shown in a balance sheet. We are of the opinion that the view taken by the Bombay High Court is erroneous and must be set aside. The appeal of the Commissioner of Income-tax is allowed
As regards the second question, Mr. Kolah, the learned counsel for the company, frankly conceded that the view taken by the High Court on this part of the case is not open to challenge and is correct. The High Court held that the profits for three months from the 1st January, 1946, to the 1st April, 1946, were not reserves which would attract the application of rule 2 of Schedule II. With this conclusion we agree. The assessee's appeal is, therefore, dismissed
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1953 (10) TMI 3 - SUPREME COURT
Whether on the facts and circumstances of this case there is a change in the persons carrying on the business within the meaning of Section 8(1) of the Excess Profits Tax Act, 1940, with effect from 14th April, 1943, when the business, which had previously been carried on in partnership between two Dayabhaga Hindu undivided families, was carried on by a partnership between the separated male members of the two families ?
Held that:- We agree with the High Court that if the case of the assessee was that even before 14th April, 1943, there was a partnership of eight persons and if that case was accepted by the Appellate Tribunal then no question of law could have arisen on those facts. It is only because the fact found was that prior to 13th April, 1943, the business was carried on by a partnership of two Hindu undivided families which prima facie means a partnership between two kartas representing two Hindu undivided families and that from 14th April, 1943, it became a business of eight individual members of two disrupted families that the question of law could arise. If, as we hold, the assessee is not entitled to go behind the facts so found by the Appellate Tribunal in the statement of the case and as is implicit in the question itself, then there can be no doubt that there had been a change in the persons carrying on the business within the meaning of Section 8 of the Excess Profits Tax Act and it has not been argued otherwise. In our opinion, therefore, the answer given by the High Court to the referred question was correct. Appeal dismissed.
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1953 (10) TMI 2 - SUPREME COURT
Whether in the circumstances of the case and on a true construction of Section 4(1)(b) and Section 14(2)(c) of the Indian Income-tax Act, the sum of ₹ 2,20,887 was in law assessable to tax ?
Held that:- On the finding of the Income-tax authorities that the 582 bars of silver lying at Bikaner had not been really sold but remained part of the unsold stock of the firm's business at the end of the accounting year, the whole of the profits of that year must be taken to have accrued or arisen at Calcutta where the business was carried on, no part of that business having admittedly been transacted at Bikaner.
We agree with the High Court that the question referred should be answered in the affirmative though on different grounds. Appeal dismissed.
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1953 (10) TMI 1 - SUPREME COURT
Whether in the facts and circumstances of these cases, the Income-tax Appellate Tribunal was right in holding that the directors of the respondent company had a controlling interest in it as contemplated by Section 2(21) of the Excess Profits Tax Act ?
Held that:- We accept this appeal and hold that the answer to the question referred by the Appellate Tribunal to the High Court should be in the negative
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