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Case Laws
Showing 121 to 140 of 699 Records
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1966 (10) TMI 139
Issues:
1. Interpretation of section 21 of the U.P. Sales Tax Act regarding the utilization of additional information received after the expiry of the limitation period.
2. Validity of considering information on additional bales received after the limitation period for assessment under section 21.
3. Disclosure requirements for determining turnover in a best judgment assessment under section 21.
Analysis:
The judgment of the Allahabad High Court in this case revolved around the interpretation of section 21 of the U.P. Sales Tax Act regarding the utilization of additional information received after the expiry of the limitation period. The case involved an assessee who was a cloth dealer carrying on business in Bareilly, with the relevant assessment year being 1954-55. The assessing officer initially completed the assessment under rule 41(5) with a turnover of Rs. 1,92,000. Subsequently, information was received regarding the import of 36 bales, which had not been considered in the original assessment. Before the four-year limitation period expired, a notice under section 21 was issued, and the dealer was informed of the additional 350 bales received after the limitation period. The subsequent assessment under section 21 resulted in a revised turnover of Rs. 4,08,000, leading to an appeal by the assessee.
The main contention raised was whether the assessing officer could consider the information on the additional 350 bales received after the limitation period for the assessment under section 21. The Judge (Appeals) held that the assessing officer had the authority to consider such additional information as long as there was a reasonable belief that turnover had escaped assessment. However, the Judge (Appeals) found fault with the lack of disclosure regarding the basis for determining the revised turnover at Rs. 4,08,000, leading to a remand for reassessment. A revision was filed against the remand order, arguing that the information on the 350 bales received after the limitation period should not have been considered. The Judge (Revisions) upheld the remand order based on the merits of the case.
The Court emphasized that under section 21, the assessing authority can take action if there is a reasonable belief that any part of the dealer's turnover has escaped assessment, without specifying a particular turnover. As long as the notice is issued within the four-year period and before the one-year completion period expires, additional items that come to light can be considered for assessment. The Court relied on precedents from the Income-tax Act to support this interpretation, highlighting that reopening an assessment allows for the inclusion of additional items that were not previously assessed. Consequently, the Court answered the question in the affirmative, ruling against the assessee and directing them to pay the costs of the reference.
In conclusion, the judgment clarifies the scope of section 21 of the U.P. Sales Tax Act, affirming the authority of the assessing officer to consider additional information on turnovers that have escaped assessment, even if such information is received after the limitation period. The decision underscores the importance of a reasonable belief in initiating assessment proceedings and the flexibility to include newly discovered items in the assessment process.
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1966 (10) TMI 138
Issues:
1. Bar on proceeding under section 10A for an offence under section 10(d) due to earlier proceeding under section 10(b).
2. Interpretation of section 10(d) of the Central Sales Tax Act, 1956 regarding the purpose of goods purchased.
3. Impact of a change in intention after processing goods by a registered dealer.
4. Sale of motion pictures after exhibition under licenses as normal sales in the industry.
5. Consideration of time limit and reasonable excuse for using goods as per the Central Sales Tax Act, 1956.
Analysis:
1. The court dismissed the contention that a proceeding under section 10A for an offence under section 10(d) is barred by an earlier proceeding under section 10(b). The court emphasized that the gist of the offences under these sections differs, and the facts constituting each offence are distinct. Therefore, the court held that there is no legal impediment to the ongoing proceedings.
2. The judgment highlighted a discrepancy in the wording between the Act and the Rules, and the certificate of registration and the charge delivered to the petitioner regarding the purpose of goods purchased. The court raised the question of whether the use of raw films for making motion pictures can be considered as processing for sale. This discrepancy required further consideration.
3. The court considered the impact of a change in intention after processing goods by a registered dealer. It was noted that there was no finding in the case regarding whether the processing of raw films by the petitioner was initially intended for sale. This aspect needed clarification and evaluation.
4. The judgment addressed the argument that the eventual sale of motion pictures by the petitioner, after permitting their exhibition under licenses, constituted normal sales in the industry. This submission was acknowledged, emphasizing the need for a comprehensive evaluation of the circumstances.
5. The court referred to Shrivastava's commentary on the Central Sales Tax Act, 1956, regarding the time limit and reasonable excuses for using goods purchased. The commentary highlighted that goods can be used for purposes other than initially intended, and business expediencies should be considered. This commentary provided guidance for interpreting the provisions of the Act.
In conclusion, the court quashed the orders under review and directed a fresh disposal of the matter in accordance with the law. The judgment emphasized the need for a thorough reconsideration before imposing any penalty on the petitioner, ensuring that the authority reaches a conclusion independently.
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1966 (10) TMI 137
Period of limitation - Held that:- Appeal dismissed. It is well-recognised that a proviso is added to a principal clause primarily with the object of taking out of the scope of that principal clause what is included in it and what the Legislature desires should be excluded. Consequently, even if it be held that the effect of the Amending Act was that, under the principal clause of section 19(1), the reassessment of the under-assessed or escaped turnover in the case of the respondent could be taken up within a period of five calendar years, that provision became ineffective because of the continued existence of the proviso. The Amending Act had not come into force when the High Court decided the petition, and consequently, the High Court had no occasion to consider its effect.
The second piece of legislation brought to our notice was the Madhya Pradesh General Sales Tax (Second Amendment) Act, 1964 (Act 20 of 1964), by which also section 19(1) of the new Act was slightly amended. That amendment, however, has no bearing on the point which we are called upon to decide in this appeal, and consequently, needs no consideration.
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1966 (10) TMI 136
Whether the value of containers of hydrogenated oil is assessable to sales tax under the Assam Sales Tax Act, 1947?
Held that:- Appeal allowed. Set aside the judgment of the High Court and direct that the answer to the question should be that the value of containers of hydrogenated oil is assessable to sales tax under the Act if there is an express or implied agreement for the sale of such containers. These appeals are, accordingly, allowed. At the time of grant of special leave this Court made a condition that the appellant will pay the cost of the respondent in any event.
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1966 (10) TMI 121
Whether the respondents are liable to be taxed under section 14-A of the Act in respect of their turnover on the transactions effected on behalf of their principals residing either in the Kasargod Taluk or in places in the former District of Malabar for the period from 1st November, 1956 to 31st March, 1957?
Held that:- Appeal allowed. The judgment of the Mysore High Court in these appeals should be set aside and the cases of the respondents should be remanded to the Commercial Tax Officer, Additional Circle, Mangalore, for ascertaining whether the disputed turnover had been included in the turnover of the non-resident principals of the respective respondents, and thereafter to proceed to make the assessments in accordance with law.
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1966 (10) TMI 120
The appellant, a registered dealer under the Bihar Sales Tax Act, was assessed to pay sales tax for four different periods. The arrears of taxes were public demands under the Bihar and Orissa Public Demands Recovery Act, 1914. The Certificate Officer claimed interest on the unpaid taxes, which the appellant disputed. The court held that interest is payable on the principal amount of the certificate at a specified rate and is recoverable in execution proceedings. The appellant's appeal was dismissed, with costs.
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1966 (10) TMI 119
Whether the order of the Board of Revenue dated the 25th August, 1958, was illegal because there was a contravention of the rule of limitation laid down by section 12(3)(i) of the Madras General Sales Tax Act inasmuch as the order of the Board of Revenue was made after a period of 4 years from the date on which the order of the Deputy Commercial Tax Officer was communicated to the assessee?
Held that:- Appeal dismissed. The doctrine of merger cannot be invoked in the circumstances of the present case.
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1966 (10) TMI 112
Issues:
1. Assessment of sales tax on chewing tobacco sales.
2. Exemption of packing material from sales tax.
3. Interpretation of rule 5(1)(g)(ii) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939.
Analysis:
1. The appellants, engaged in the business of chewing tobacco, were assessed for sales tax on their turnover from selling chewing tobacco. The contention that the tobacco purchased by them did not undergo a manufacturing process was rejected by the authorities, including the High Court of Madras. The courts upheld the tax assessment on the sale of chewing tobacco.
2. The appellants argued that the packing material used for preparing packets of chewing tobacco should be exempt from sales tax post-December 13, 1957. However, the Deputy Commercial Tax Officer rejected this claim, stating that the packing material, even if rendered unusable after the sale of chewing tobacco, was still taxable. The High Court upheld this decision, emphasizing non-compliance with rule 5(1)(g)(ii) of the Sales Tax Rules.
3. The case referred to a previous judgment where it was discussed whether packing material is taxable when tobacco products are sold. The court highlighted the need for explicit contracts for the sale of packing material between the parties. In this case, since the appellants did not specify separate charges for chewing tobacco and packing material, the claim for exclusion of packing material value from taxation was dismissed. The court upheld the tax assessment on the packing material used for chewing tobacco packets.
In conclusion, the Supreme Court dismissed the appeal, stating that the failure to specify separate prices for chewing tobacco and packing material led to the rejection of the claim for excluding the value of packing material from taxation. The judgment emphasized the importance of complying with tax rules and providing clear documentation for separate charges to claim exemptions effectively.
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1966 (10) TMI 111
The Supreme Court allowed the appeals of tobacco dealers regarding sales tax assessment for chewing tobacco. The dealers were not entitled to deduction of excise duty on raw tobacco. The value of packing materials was not included in the taxable turnover. No costs were awarded.
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1966 (10) TMI 106
Whether a dealer who pays excise duty on raw tobacco purchased by him is entitled to rebate of that duty in the computation of taxable turnover from the sale of chewing tobacco manufactured out of that raw tobacco?
Held that:- Appeal allowed. The Madras General Sales Tax Act deals with the levy of sales tax and section 5 provides for the rates of sales tax and the point at which tax is to be levied. The proviso could obviously not refer to tax other than the sales tax with which the whole Act, and especially the provisions of section 5, deals. It is intended to provide by the proviso that in the computation of taxable turnover of a dealer in respect of any goods included in clause (vii) the dealer is entitled to the rebate to the extent of sales tax paid by him on the raw tobacco used in the manufacture of those goods.
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1966 (10) TMI 101
Whether the petitioners can be said to be dealers in cotton within the meaning of the definition of "dealer" in section 2(6) of the Bombay Sales Tax Act, 1953?
Whether the sale of 411 bales of Californian cotton effected by them during the assessment year 1953-54 can be included in their total turnover and be charged to sales tax?
Held that:- Appeal dismissed. There was no intention on the part of the respondents to carry on business of selling cotton, and that the High Court was right in its conclusion
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1966 (10) TMI 79
Issues Involved:
1. Rectification of the register of members under Section 155 of the Companies Act.
2. Legality of the transfer of shares without a proper instrument of transfer.
3. Delay in filing the petition.
4. Application of Section 108 and relevant articles of the company's memorandum of association.
5. Jurisdiction and summary proceedings under Section 155.
Detailed Analysis:
1. Rectification of the Register of Members under Section 155:
The petitioner sought an order under Section 155 of the Companies Act to rectify the register of members of the company by inserting his name as the holder of two fully paid-up equity shares. The petitioner's case was that his name had been transferred without authority and illegally to the second respondent, necessitating rectification.
2. Legality of the Transfer of Shares without a Proper Instrument of Transfer:
The petitioner argued that the transfer of shares was executed without a proper instrument of transfer, contrary to Section 108 of the Companies Act and the company's articles of association. The relevant articles (53, 54, 55, 58, 59, 62, and 63) and Section 108 mandate that a duly stamped and executed instrument of transfer must be submitted for the transfer to be valid. The company had transferred the shares without such an instrument, making the transfer prima facie illegal.
3. Delay in Filing the Petition:
The respondents contended that the petition was filed after a significant delay. However, the court noted that the petitioner had lost the right to file a suit due to the law of limitation, making the petition under Section 155 the appropriate remedy.
4. Application of Section 108 and Relevant Articles of the Company's Memorandum of Association:
The court emphasized the mandatory nature of Section 108 and the relevant articles, which require a proper instrument of transfer for the registration of share transfers. The court referred to several precedents, including Public Passenger Service Ltd. v. M. A. Khadar and Associated Clothiers v. Union of India, to support the petitioner's contention that the burden was on the company to show sufficient cause for the transfer.
The court found that the company had transferred the shares without a proper instrument of transfer and without the petitioner's application, in violation of Section 108 and the articles. The company had relied on statements made by Gordhanbhai Patel without sufficient evidence of his title to the shares, leading to an unlawful transfer.
5. Jurisdiction and Summary Proceedings under Section 155:
The court held that the jurisdiction under Section 155 is beneficial and should be liberally exercised. The court noted that complicated questions of title or facts, if present, would necessitate a suit. However, in this case, the court found no such complications and deemed it unnecessary to refer the petitioner to a suit.
The court rejected the respondents' contention that the transfer without an instrument was justified by the company's articles or that there was no completed contract between the petitioner and the company. The court found that the company had acted without sufficient cause in transferring the shares and omitting the petitioner's name from the register.
Conclusion:
The court ordered the rectification of the register of members by inserting the petitioner's name as the holder of the two shares and directed the respondents to pay costs fixed at Rs. 500. The judgment underscores the mandatory nature of Section 108 and the necessity for a proper instrument of transfer in share transactions.
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1966 (10) TMI 78
Issues Involved:
1. Winding-up order of Bangeswari Cotton Mills Ltd.
2. Application for certified copy of the judgment and order.
3. Delay in requisition for drawing up the order.
4. Appeal barred by limitation.
5. Exclusion of time under Section 12 of the Limitation Act, 1963.
6. Interpretation of "time requisite" in Section 12(2) of the Limitation Act.
7. Application of Companies (Court) Rules, 1959.
8. Granting of interim injunction.
Issue-wise Detailed Analysis:
1. Winding-up Order of Bangeswari Cotton Mills Ltd.:
The High Court of Calcutta issued a winding-up order for Bangeswari Cotton Mills Ltd. on June 24, 1966, under the Companies Act, following an application by the petitioning creditor.
2. Application for Certified Copy of the Judgment and Order:
The applicant's court clerk applied for a certified copy of the judgment and order on June 25, 1966, but did not requisition for the completion of the order, mistakenly believing the petitioning creditor's solicitor had done so.
3. Delay in Requisition for Drawing up the Order:
The applicant's new solicitor filed a requisition for drawing up the order on August 10, 1966, after learning no requisition had been made. The applicant also sought leave to file the memorandum of appeal without the certified copy of the order, condonation of delay, and other reliefs.
4. Appeal Barred by Limitation:
The petitioning creditor contended the appeal was barred by limitation, arguing that sufficient cause for not filing the appeal within the prescribed period was not demonstrated.
5. Exclusion of Time under Section 12 of the Limitation Act, 1963:
The applicant argued that under Section 12(2) of the Limitation Act, the time taken by the court to prepare the order and grant the certified copy should be excluded from the limitation period. The petitioning creditor countered that the failure to requisition the order rendered the application for a copy infructuous, thus disqualifying the applicant from exclusion of time under Section 12(2).
6. Interpretation of "Time Requisite" in Section 12(2) of the Limitation Act:
The court examined precedents, including Pramatha Nath Roy v. Lee and J.N. Surty v. T.S. Chetlyar, which established that "time requisite" excludes periods of delay attributable to the appellant's lack of diligence. The court concluded that the time taken by the court to prepare the decree or order, after an application for a copy has been made, should be excluded, but not the period consumed by the party's failure to requisition the order.
7. Application of Companies (Court) Rules, 1959:
The court considered Rule 111(1) of the Companies (Court) Rules, which mandates the Registrar to draw up a winding-up order as soon as possible. However, Rule 6 of the Companies (Court) Rules saves the practice and procedure of the court, requiring a requisition for drawing up the order. The court found no inconsistency between the Companies Act and the court's practice, necessitating a proper requisition for the order.
8. Granting of Interim Injunction:
The court granted an interim injunction restraining the respondent from enforcing the winding-up order, conditional upon the applicant furnishing security for six lakhs within three months. The applicant was allowed to conduct day-to-day business but not to encumber company properties. The appeal hearing was expedited, and the applicant was directed to file cyclostyled copies of the paper book by January 3, 1967.
Conclusion:
The court concluded that the applicant was not at fault for the delay in requisitioning the order, as the initial failure was due to the petitioning creditor's inaction. The appeal was not time-barred, and the applicant was entitled to the exclusion of time under Section 12 of the Limitation Act. The court granted the interim injunction with specific conditions and expedited the appeal hearing.
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1966 (10) TMI 65
Issues Involved:
1. Priority of State Government's debts in the liquidation of an insolvent company.
2. Applicability of Section 64(1)(a) of the Insolvency Act versus Section 530(1)(a) of the Companies Act.
3. Interpretation of Section 529(1) of the Companies Act in relation to insolvency law principles.
4. Relevance of common law rule of Crown priority in the context of the Companies Act.
Detailed Analysis:
1. Priority of State Government's Debts:
The liquidator's rejection of the State Government's claim for priority of its debts, except as provided under Section 530(1)(a) of the Companies Act, was upheld. The appeal against this rejection, made under Section 460(6) of the Companies Act read with Rule 164 of the Companies (Court) Rules, was also rejected.
2. Applicability of Section 64(1)(a) of the Insolvency Act versus Section 530(1)(a) of the Companies Act:
The judgment clarified that the Companies Act, specifically Section 530(1)(a), provides a distinct scheme for debt priority that differs from Section 64(1)(a) of the Insolvency Act. Section 530(1)(a) prioritizes only certain types of government debts (revenues, taxes, cesses, and rates) due within twelve months before the relevant date, whereas Section 64(1)(a) of the Insolvency Act gives priority to all government debts. The judgment emphasized that the Companies Act's provisions are comprehensive and self-contained, making it unnecessary to incorporate the Insolvency Act's provisions.
3. Interpretation of Section 529(1) of the Companies Act:
The court interpreted Section 529(1) of the Companies Act to mean that the principles (not the statutory rules) of insolvency law should apply to the winding up of an insolvent company. The judgment favored a narrower interpretation of Section 529(1)(a), which pertains to what debts are provable, rather than applying all insolvency rules, including those of priority. This interpretation ensures consistency with Section 530(1) of the Companies Act, which enacts its own priority scheme.
4. Relevance of Common Law Rule of Crown Priority:
The judgment ruled out the application of the common law rule of Crown priority, citing that the Companies Act's provisions for pari passu distribution of assets (Section 511) and specific priority rules (Section 530) override any common law rule. The court referenced previous cases, such as Food Controller v. Cork and Governor-General in Council v. S.S. Mills, to support this conclusion.
Conclusion:
The court concluded that Section 529(1) of the Companies Act does not attract the rules of priority from Section 64 of the Insolvency Act. The judgment emphasized the necessity of choosing the specific provisions of the Companies Act over the general rules of another statute. The application was dismissed with costs, affirming the liquidator's rejection of the State Government's claim for priority outside the scope of Section 530(1)(a) of the Companies Act.
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1966 (10) TMI 53
Whether, after the execution of the deed of surrender on 21st July, 1955, the income from the trust properties was exempt from income-tax under section 4(3)(i) of the Act or not?
Held that:- The exemption of the income of the trust properties from liability to income-tax was not dependent entirely on the coming into operation of clause 8, and we, therefore, think that the question framed should have been broken up into two parts as follows:
"(1) Whether clause 8 of the trust settlement made on 25th November, 1946, came into operation immediately following the declaration made by Bai Kasturbai on 21st July, 1955 ? and
(2) Whether, in the circumstances of this case, the income that accrued or arose to the trustees from the trust properties from 21st July, 1955, onwards, was exempt under section 4(3)(i) of the Act ?"
If the question is so broken up, the first question becomes unnecessary, and the second question has to be answered in favour of the respondent. The answer to the second question is the only one that is material for purposes of determining the liability of the income of the trust to tax. That question has been answered by the High Court in favour of the respondent. The appeals, therefore, fail
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1966 (10) TMI 52
Whether, having regard to the provisions of section 12B(ii), the assessee is entitled to claim a deduction from the full value of the consideration of ₹ 45,262-50P. received for the capital asset, the sum of ₹ 37,630 or any similar sum ?
Held that:- In working out capital gain or loss, the principles that have to be applied are those which are a part of the commercial practice or which an ordinary man of business will resort to when making computation for his business purposes. The principles of accounting indicated by us above are clearly the principle that must be applied in order to find out the net capital gain or loss arising out of a transaction of the nature with which we are concerned. The application of those principles indicates that the claim of the appellant that the net capital gain by her is not re resented by the whole amount of ₹ 45,262.50P. realised by her on renouncement of her right to receive the new shares was correct and that the net capital gain can only be properly computed after deducting the sum of ₹ 37,630 which approxim ately represents the loss incurred simultaneously by the appellant in her original asset of 710 old shares as a result of the depreciation in their value. The question referred to the High Court must, therefore, be answered in favour of the appellant. The appeal is, consequently, allowed, the answer returned by the High Court is set aside, and the question is answered in the affirmative. Appeal allowed.
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1966 (10) TMI 51
Whether, on the facts and in the circumstances of the case, the inclusion, in the estate of the deceased, of the amount of ₹ 10,43,050 being the trust fund, was justified in law ?
Held that:- The High Court was right in holding that though the shares were not to be delivered over to Manubhai until he attained the age of twenty-five years, the shares belonged to him since the execution of the deed of trust, and he was also beneficially entitled to the income from the shares; that his interest in the shares and the income was not an estate in remainder or reversion, nor was his interest a future interest; and that he was presently entitled to the whole income of his one-half share in the said 160 shares and after provision of maintenance and advancement, if any surplus remained, it was to be accumulated and he was the beneficial owner of the accumulation of such surplus income and but for clause 5 he could dispose it of as he willed, and if he died it was heritable by his heirs. Appeal dismissed.
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1966 (10) TMI 50
Whether the High Court in appeal did not decide whether any primary facts on which the determination of the issue of reasonable belief in non-disclosure of material facts necessary for the assessment of the previous year and escapeme nt of tax in consequence thereof depended were not disclosed, the judgment of the High Court should be set aside?
Held that:- The High Court has pointed out that no final decision about failure to disclose fully and truly all material facts bearing on the assessment of income and consequent escapement of income from assessment and tax could be recorded in the proceedings before them. It certainly was not within the province of the High Court to finally determine that question. The High Court was only concerned to decide whether the conditions which invested the Income-tax Officer with power to re-open the assessment did exist, and there is nothing in the judgment of the High Court which indicates that they disagreed with the view of the trial court that the conditions did exist. Appeal dismissed.
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1966 (10) TMI 49
Whether the unabsorbed losses incurred by the assessee in the earlier years in its life insurance business are available to be set off against its profits from general insurance business for the assessment years 1951-52 to 1954-55?
Held that:- The High Court was right in holding that the life insurance business and the general insurance business constitute the same business within the meaning of section 24(2) of the Act. Appeal dismissed.
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1966 (10) TMI 48
Whether rebate under section 15(1) of the Income-tax Act, 1922, is admissible on the premia payable as per annexure 'A' during the minority of the assessee ?
Held that:- The object of enacting section 15(1) of the Act is the encouragement of thrift and the section should hence be interpreted in such a manner as not to nullify that object. Having examined all the clauses of the contract of insurance in this case, we are satisfied that it is in substance a contract of insurance on the life of the assessee and, therefore, rebate under section 15(1) of the Act is admissible on the premium payable as per annexure " A " of the statement of the case during the minority of the assessee. For these reasons We hold that this appeal must be allowed with costs of this court and of the High Court. Appeal allowed
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