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1956 (8) TMI 72
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... ... ..... and, therefore, Section 21 of the General Clauses Act cannot be applied to such a case. There must be an order first before, it can be varied or amended by virtue of Section 21. The cases relied upon by the learned Advocate-General, namely, Bhuban Mohan Basak v. Chairman, Decca Municipality (31 CWN 926 AIR 1927 Cal 704) (E) ; Basanta Chandra v. Emperor, ILR 23 Pat 968 (AIR 1945 Pat 44) (FB) (F) and Basanta Chandra Ghose v. Emperor. AIR 1945 PC 18 1945 FCR 81 (G) and Balu Ram v. The State AIR 1950 Ajmer 56 (H) have, therefore, absolutely no application to the present case, as in all these cases there was an existing order on which Section 21 of the General Clauses Act would operate. 16. For the reasons given above, I would allow the application, make the rule absolute, and issue a writ of certiorari quashing the order of the Appeal Board dated the 3rd March, 1956. The petitioner will be entitled to his costs; hearing fee ₹ 100/-. Vaidynathier Ramaswami, C.J. 17. I agree.
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1956 (8) TMI 71
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... ... ..... ch building, machinery or plant being sold, and whether the building, machinery or plant is sold separately and individually or sold together and the whole of the undertaking is transferred, the position is identical under the proviso. The object of the Legislature in enacting the proviso is clear that if any building, machinery or plant realises a price on sale which is more than the written down value, then to the extent that depreciation has been claimed and allowed to the company, the company should make good that depreciation. If that is the principle underlying this proviso, we see no reason why the application of that principle should be limited to a case where a part of the undertaking is sold and not the whole. 5. The result is that we must answer the question in the supplementary statement of the case in the affirmative and also the main question raised in the reference in the affirmative. 6. The assessee must pay the costs. 7. Questions answered in the affirmative.
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1956 (8) TMI 70
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... ... ..... owers between the Parliament of the Union and the State Legislature. It has nothing to do with laws already made and, if those laws are not contrary to any provisions of the Constitution, in cannot be said that those laws are not valid. The words 'subject to the other provisions of this Constitution,' in Article 372, do not mean that laws which had been passed by the Central Legislature before 26-1-1950 automatically cease Co have effect because the subject has now been made a State subject." I am in respectful agreement with the decision of the Allahabad High Court and I would hold that the learned Judge has taken an erroneous view on this point also. I would therefore allow this petition, set aside the order of the Special Judge and remit the case for trial in accordance with law I direct that the case be tried by the learned Sessions Judge Mr. Hans Raj Khanna himself. 6. The parties are directed to appear before Mr. Hans Raj Khanna on the 17th September 1956.
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1956 (8) TMI 69
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... ... ..... sioner of Income-tax 1955 28 ITR 231 could be extended does not arise for consideration either, It is not therefore necessary for us to determine in these proceedings the limits of the principle laid down in Hariram Sait's case (supra ) except to observe that in that case the assessee, Hariram Sait, on whom penalty was levied, was assessed not in the status of a Hindu undivided family but in his individual status. We had occasion to explain in our unreported judgment in W.P. Nos. 743 and 748 of 1955, the real nature of the Hindu undivided family as a juristic entity for purposes of assessment under the Income-tax Act. We pointed out that a change in karthaship by death or otherwise did not affect the legal continuity of that juristic entity. Since, in our opinion, the requirements of section 28(1)(c ) were not satisfied, we have to answer the question referred to us in the negative and in favour of the assessee. The assessee will be entitled to the costs of the reference.
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1956 (8) TMI 68
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... ... ..... entage of the net profits that concludes the issue, nor the quantified sum. It may be that in some cases even both taken together may not be conclusive. All the circumstances specifically referred to in the proviso to section 10 (2) (x), judged from the view point of a normal prudent business man, will have to be taken into account in deciding whether the remuneration paid to an employee by way of commission constitutes a reasonable expenditure of the employer in the conduct of his business. 11. Our answer to the question referred to this Court is in the negative and in favour of the assessee. The respondent shall pay the assessee its costs of this reference. We have however to point out that we have answered the question as it has been framed, with reference to the percentage of commission and not with reference to the quantum claimed by the assessee ; any disallowance on the ground that the quantum claimed was not arithmetically correct will be left untouched by our answer.
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1956 (8) TMI 67
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... ... ..... r it is co-related to a year of assessment immediately following it, but it is not necessarily wedded to an assessment year in all cases and it cannot be said that the expression 'previous year' has no meaning unless it is used/in relation to a financial year". We are of opinion that on the analogy of this decision of the Supreme Court, the context in which the words "six previous years" appear in the proviso to section 2(6A)(c) shows that these words only mean the six accounting years of a company preceding the date of liquidation. There words have nothing to do with the company being chargeable to income-tax in each of the years following the six accounting years. Our answer, therefore, is that on the facts and in the circumstances of this case, the sum of ₹ 26,000 received by the assessee on 22nd April, 1950, is liable to be taxed in the assessee's hands as dividend within the meaning of that term in section 2(6A)(c) of the Income-tax Act.
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1956 (8) TMI 66
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... ... ..... ular deduction could not be claimed as the sale of the machinery fell outside this period and no business was carried on outside that period. It is difficult to understand how the Advocate-General on behalf of the Taxing Department can put forward the contention that the year of account was different from the year of account adopted and accepted by the Income-tax Officer on the strength of which the order of assessment has been made. It is not open to the Department now for the purpose of this argument to put forward the contention that the year of account was different from the one which the Income-tax Officer accepted, and as we have already pointed out, if that was the year of account then there is no answer to the assessee's claim that this amount is a permissible deduction under section 10(2)(vii) of the Income-tax Act. The result is that we must answer the first question in the affirmative and the second question in the negative. The assessee to get half the costs.
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1956 (8) TMI 65
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... ... ..... assessees. In our opinion, once the Tribunal came to the conclusion that the shares were not the stock-in-trade of the assessee-company, only one inference in law was possible and that inference was that the loss in respect of these shares was a loss of a capital nature and not of a revenue nature. In view of the fact that we are not allowing the notice of motion taken out by the assessees, the notice of motion taken out by the Commissioner, which is only consequential upon the finding of the Tribunal that the shares are the stock-in-trade of the assessee company, does not survive. The result is that we must answer the question submitted to us as follows (1)Acquisition of the managing agency was an acquisition of a capital asset. (2)The loss in respect of the 400 shares was of a capital nature. The assessee to pay the costs. The notice of motion taken out by the assessee dismissed with costs. The notice of motion taken out by the Commissioner dismissed. No order as to costs.
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1956 (8) TMI 64
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... ... ..... ity of the person actually in receipt of the income. In such a situation, it would be impossible to hold that the activity of "the second-mentioned person" was considered as the criterion for the judging of the eligibility of the "first-mentioned person" to earned income relief. In our opinion, all that Marimuthu had to satisfy with reference to the third of the tests we have mentioned above was that he was actively engaged in the conduct of the business of the firm of which he was a partner. That test he satisfied. His claim that earned income relief should be granted not only on the basis of the share of the firm's profits but also on the shares of his minor sons, which were included in his assessable income under the provisions of section 16(3)(a)( ii) of the Act, was well founded. Our answer to the consolidated question referred to us is in the affirmative and in favour of the assessee. The assessee will be entitled to the costs of this reference.
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1956 (8) TMI 63
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... ... ..... rovisions are the machinery sections to determine the amount of tax, which enable the liability to be quantified and when quantified to be enforced against the subject, but the liability is definitely and finally created by the charging section. Section 13 is a machinery section, and not a charging section. Section 13 means that if a receiver is in possession, he shall be deemed to be the assessee, and he shall be liable to be assessed, and to pay the tax. But, as I have said before, section 13 does not apply to the present case at all. The contention of Mr. Rajeshwari Prasad must, accordingly, be overruled. The assessment on the petitioner has been correctly made. For the reasons given above, the question referred by the Board must be answered in the affirmative, against the assessee and in favour of the Department. The State of Bihar will be entitled to its costs, hearing fee ₹ 200 (Rupees two hundred). RAMASWAMI, C.J.--I agree. Reference answered in the affirmative.
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1956 (8) TMI 62
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... ... ..... ₹ 12,50,000 to permit a part of it which was not utilised for meeting the liability with regard to taxation as reserve. There may be force in the Advocate-General's contention on this point, but we do not find that this contention has ever been raised by the Commissioner either on his application to the Tribunal to make a reference or in the notice of motion taken out before us. The question which the Commissioner suggests should be raised on the notice of motion is not different from the question raised by the Tribunal itself. The only virtue about the Commissioner's question is that it seeks to incorporate in the question arguments and facts which are already set out in the statement of the case. Therefore, in our opinion, the notice of motion taken out by the Commissioner must fail. The result is that we must answer the question submitted to us in the affirmative. The Commissioner to pay the costs of the reference and also the costs of the notice of motion.
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1956 (8) TMI 61
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... ... ..... not file a return at all during 1944-45. The further question, namely, whether section 24(3) would apply to an assessment made under section 34 of the Act need not be considered in this case, as even if it does, in the view we have expressed, the assessee would not be entitled to the relief he asked for. In Anglo-French Textile Co. Ltd. v. Commissioner of Income-tax(1), the High Court proceeded on the ground that when proceedings were taken under section 34, the assessee was not entitled to reopen the whole proceedings as the further proceedings were limited to assessing that portion of the income which had escaped assessment. But the Supreme Court left open that question. We do likewise, as in the view we have expressed, the scope of section 34 would not arise for consideration. For the aforesaid reasons we answer the question in the negative. As the assessee has failed, he must pay the costs of the respondent which we fix at ₹ 250. Reference answered in the negative.
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1956 (8) TMI 60
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... ... ..... am adopting were followed some evidence available to the plaintiff now may be lost, because the evidence is of two very old witnesses who are 75 years old. I do not think such a consideration should come in the way of my deciding this preliminary issue, because, in that case no preliminary issue would be decided by a Court and secondly the matter does not seem to be of such urgency. The plaint was filed in 1951 and the suit has been pending now for over five years. No notice of motion was taken out for expedition on this ground or for the examination of these witnesses de bene esse both courses being open to him at all stages of the suit. 29. I therefore answer the preliminary issue, being issue No. 1 in the affirmative. As I have treated this issue as an issue of law and answered it in the affirmative, it is not necessary for me to proceed with the other issues and come to a finding on the other issues. The suit must therefore stand dismissed with costs. 30. Suit dismissed.
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1956 (8) TMI 59
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... ... ..... the Act of 1954 is obnoxious to the provisions of Article 19 is equally futile, for although every citizen of India is at liberty to pursue a lawful calling of his own choosing, this right is subject to the paramount right of the State to impose such reasonable restrictions as the protection of the public may require. The Constitution does not confer unfettered discretion on any person to conduct a business so as to injure the public at large or any substantial group thereof. The Legislature has decided that no person shall carry on any business in tobacco unless he has obtained a licence in this behalf and I am unable to hold that this requirement is either unreasonable or not in the public interest. 16. For these reasons I am of the opinion that neither the Act of 1954 nor rule 4 of the rules framed thereunder can be regarded as invalid on any of the grounds relied upon by the petitioner. The petition must accordingly be dismissed with costs. Bishan Narain, J. 17. I agree.
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1956 (8) TMI 58
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... ... ..... by the Income-tax Officer under the original assessment. It is also true that the figure suggested by the assessee, viz., ₹ 54,474, is not necessarily the correct adjustment. But it was the duty of the Income-tax Officer, acting under section 34, to have got the figure adjusted before he passed his final assessment order, and what the Appellate Assistant Commissioner did was the right thing, viz., to direct the Income-tax Officer to give effect to the original assessment order by adjusting the figure of ₹ 1,11,271 in accordance with the directions given by the Tribunal. Therefore, in our opinion, on the facts of this case, the appeal preferred by the assessee to the Appellate Assistant Commissioner was competent. We will therefore frame another question to the effect "Whether on the facts of this case the appeal preferred by the assessee to the Appellate Assistant Commissioner was competent?" and we answer that in the affirmative. No order as to costs.
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1956 (8) TMI 57
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... ... ..... er by clause (5) of rule 48. It is on this ground that we direct that the rule nisi issued in each of these petitions be confirmed. The petitions will be allowed. That in effect means that the Income-tax Officer will have to go again into the question and decide whether the petitioner has made out a case for the exercise of the discretion vested in the Income-tax Officer to waive or reduce the interest, in exercise of the power vested in him by the last proviso to sub-section (6) of section 18A. It is only if the Income-tax Officer refuses to exercise his discretion in favour of the assessee that the question of the petitioner as an assessee approaching the Inspecting Assistant Commissioner under clause (5) of rule 48 could arise. The petitioner if so advised may apply to the Income-tax Officer afresh for waiver or reduction of interest under the terms of the proviso to sub-section (6) of section 18A and rule 48. There will however be no order as to costs. Petitions allowed.
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1956 (8) TMI 56
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... ... ..... d that liability clearly arises from the facts stated in the statement of the case, then it is open to us to say that we disagree with the view of the Tribunal that the assessee is liable under section 10(6), but that he is liable under some other provision of the Act. In I.T. Reference No. 47 of 1954 we held that this Association was liable to pay tax on its income under section 12. It is difficult to understand how we can take a different or a contrary view on this reference. Therefore we will re-formulate the question as follows "Whether on the facts and in the circumstances of the case the receipts in question have been properly taxed?" and answer that in the affirmative. As the assessee was fully justified in coming on this reference by reason of the finding of the Tribunal and as the Department sought to assess the assessee to tax under section 10(6), we think that the Commissioner should pay the costs of this reference. Reference answered in the affirmative.
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1956 (8) TMI 55
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... ... ..... f half that amount it can claim a deduction for the purpose of assessing its profits or gains for the purpose of taxation. But with regard to this particular amount of ₹ 3,56,054 it was not an amount which was at the disposal of the company to do with it what it liked. It was not open to the company to utilise any part of this amount either for declaring dividend or giving benefits to the policy-holders. By statute this amount had to be credited to the life fund in order to make good the deficit which had occurred in the earlier years. Therefore, in our opinion, it could not be said of this sum of ₹ 3,56,054 that it was reserved for the policyholders within the meaning of rule 3(a). In our opinion, therefore, the Tribunal was right in the view that it took that no deduction could be allowed to the company in respect of this amount. We, therefore, answer the question submitted to us in the negative. The company to pay the costs. Reference answered in the negative.
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1956 (8) TMI 54
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... ... ..... t the condition is required by the Legislature. Then the third judgment which was referred to is the judgment in Commissioner of Income-tax v. Ramsukh Motilal 1955 27 I.T.R. 54. We were there dealing with a notice under section 34 and we said that whereas section 22 was a procedural section and the failure to give notice or a defect in a notice was a procedural defect, in the case of section 34 it was not a procedural defect but was a failure to comply with a condition precedent to the assumption of jurisdiction. It is not possible to suggest that section 43 stands on the same footing as section 34. Section 43 is procedural, whereas section 34 is a section dealing with the jurisdiction of the Income-tax Officer and lays down the conditions which have got to be complied with before that jurisdiction can be assumed. In our opinion, therefore, the answer to the question submitted to us must be in the negative. The assessee must pay the costs. Reference answered in the negative.
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1956 (8) TMI 53
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... ... ..... ssible deductions even within the meaning of the wide provision contained in the English income-tax law. Therefore, this decision is not of particular help to us in deciding the question that we have to decide. We would decide this reference on the view that the liability which the assessee discharged, although it was a statutory liability, arose by reason of the business carried on by the assessee with the non-resident and there would have been no liability if he had not carried on the business. Therefore the amount claimed by the assessee is an admissible deduction under the Income-tax Act, whether the deduction falls under section 10(2)(xi) or may be looked upon as a trading or business loss. We will amend the question as follows "Whether on the facts and in the circumstances of the case the amount of ₹ 3,20,162 is an allowable deduction?" and answer that question in the affirmative. The Commissioner to pay the costs. Reference answered in the affirmative.
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