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Case Laws
Showing 41 to 60 of 87 Records
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1962 (3) TMI 92 - PRIVY COUNCIL
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... ... ..... ; 11 Tax Cas. 538, 542.) "whether the operations involved in it are of the same kind, and carried on in the same way, as those which are characteristic of ordinary trading in the line of business in which the venture was made." The company had power to deal in shares; they bought shares, they received a dividend on these shares, they sold the shares. This was just the ordinary commercial transaction of a dealer in shares. I ask myself the question put by Lord Radcliffe in Edwards v. Bairstow( 1956 A.C. 14, 37; 1955 28 I.T.R. 579.) "What detail does it lack that prevents it being an adventure in the nature of trade, or what element is present in it that makes it capable of being aptly described as anything else?" What is it if it is not trade? In my view the transaction in question was an adventure in the nature of trade and the commissioners had no grounds upon which they could hold that it was not. I would dismiss the appeal. Appeal dismissed with costs.
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1962 (3) TMI 91 - CALCUTTA HIGH COURT
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... ... ..... f the community and celebrated events in the community. Certainly these objects may be laudable in themselves as cherishing memories of people whom the public ought to remember. But the establishment of funds for preservation and erection of monuments would not be a charitable purpose within the meaning of the expression used in the Income-tax Act. Lastly, doing acts, deeds and things for the welfare of the Kedia community would not necessarily be charitable. In the result, as the income derived from the property is not held under a trust or other legal obligation wholly for religious or charitable purposes, it cannot be exempt under the provisions of section 4(3)(i) mentioned above. Learned counsel for the assessee did not press his case with regard to the second portion of section 4(3)(i) and in this view of the matter, the answer to the question must be in the negative. The assessee must pay the costs of this reference. LAIK J.--I agree. Question answered in the negative.
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1962 (3) TMI 90 - MADRAS HIGH COURT
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... ... ..... hough the unit is set up after the Act, the operations for the establishment commenced earlier than the Act. It seems to us that the scope of the second proviso is quite clear and that there is no need to strain the expression "set up" occurring in section 5(1)(xxi) because of the language of the proviso. In this case, the new and separate unit was put in a ready stage to go into production only after the commencement of the Act and that, therefore, it was set up after the Act within the meaning of the said expression in section 5(1)(xxi). In view of the language of the second proviso, the benefit of exemption will be available to the assessee only for the first five successive assessment years commencing from 1st April, 1957. The assessee's claim for exemption should, therefore, have been allowed. The question is answered in favour of the assessee. The department will pay the costs to the assessee. Counsel's fee ₹ 250. Reference answered accordingly.
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1962 (3) TMI 89 - MYSORE HIGH COURT
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... ... ..... to the question as to what was the process ordinarily employed by the cultivators in the locality where the assessee resides to render the tamarind grown by them fit to be taken to market. That being so, it is necessary for us to call for a further statement of the case from the Tribunal under section 66(4) of the "Act". The Tribunal will submit that statement by the end of July, 1962. If the Tribunal thinks that it cannot submit the statement in question without taking additional evidence, it is permitted to take additional evidence after duly notifying the parties. We want the Tribunal to submit a further statement of the case bearing on the question as to "what is the process ordinarily employed by cultivators of tamarind residing in the locality in which the assessee resides, to render the tamarind raised by them fit to be taken to market". These cases will be posted for further hearing after the receipt of the statement called for. Order accordingly.
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1962 (3) TMI 88 - SUPREME COURT
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... ... ..... number of employees engaged in this branch is 31, whereas the total number of employees is 211. Besides; the containers are produced only for the use of the Mills. They, were not intended to be sold in the market at ill. Price for the containers is not also charged from the customers. Indeed, containers are required even for the purpose of storage of the vegetable oil. It is thus clear that the fabrication of tin containers has been undertaken by the Mills only as a feeder activity ; it is integrally connected with its main business of producing and marketing vegetable oil and as such, it is a minor part of the said activity. Having regard to the relevant facts admitted or proved in the present case, we are satisfied that the High Court, was right in coming to the conclusion that the Mills was not a factory within the meaning of section 1(3)(a). The result is, the appeal No. 387 of 1959 fails and is dismissed with costs. C.A. 361 of 1959 allowed. C. A.387 of 1959 dismissed.
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1962 (3) TMI 87 - ALLAHABAD HIGH COURT
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... ... ..... income because it might be a non-assessable receipt of another kind. The inaccuracy in the particulars may have no bearing on the question whether the receipt is assessable or not; one can give inaccurate particulars of a non-assessable receipt also. There was sufficient material in the instant case for holding that the claim made by the assessee that the amount of ₹ 5,000 was a deposit and not income was false and also for the finding that it was income. Since the particulars given by the assessee in the accounts and in the return were different, it was a clear case of concealment of or furnishing inaccurate particulars and the income-tax authorities were justified in imposing the penalty. In the result the question referred to us is answered in the affirmative. Let the reference be returned with this answer to the Tribunal. The opposite party shall get its costs of the reference, which we assess at ₹ 200, from the assessee. Question answered in the affirmative.
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1962 (3) TMI 86 - HOUSE OF LORDS
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... ... ..... uot; an under-assessment. Mr. Shelbourne said that "discovery" means finding out something new about the facts. It does not mean a change of mind about the law. He said that everyone is presumed to know the law, even an inspector of taxes. I am afraid I cannot agree with Mr. Shelbourne about this. It is a mistake to say that everyone is presumed to know the law. The true proposition is that no one is to be excused from doing his duty by pleading that he did not know the law. Every lawyer who, in his researches in the books, finds out that he was mistaken about the law, makes a discovery. So also does an inspector of taxes. On this point I find myself in full agreement with the judgment of Lord Normand in the Court of Session and Tucker L.J. in the Court of Appeal . I would therefore dismiss this appeal. LORD MORRIS OF BORTH-Y-GEST. My Lords, I concur, and my noble and learned friend, Lord Guest, has asked me to say that he also concurs. Appeal dismissed with costs.
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1962 (3) TMI 85 - MADHYA PRADESH HIGH COURT
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... ... ..... uot; given in section 2(6A) (a), then, as we have pointer out earlier it cannot be regarded as dividend even within the ordinary definition of that word. The first question must, therefore, be answered in the negative. It is not necessary to decide the issue raised by the second question. Shri Chitale, learned counsel appearing for the assessees, did not contest the question and accepted for the purposes of this reference that the Appellate Assistant Commissioner could enhance the assessment sub motto or at the instance of the Income-tax Officer under section 31(3)(a) of the Act. For the foregoing reasons, our answer to the first question is that the sums of ₹ 1,64,352 and ₹ 3,91,381 received by the assessees, Messrs. Shrikrishan Chandmal and Nandlal Bhandari and Sons Private Ltd., respectively, are not dividend and are not taxable as such in the hands of the two assessees. The second question does not arise. There will be no order as to costs. Order accordingly.
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1962 (3) TMI 84 - SUPREME COURT
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... ... ..... of the Revenue Minister, will be deemed to be an order of the Council of Ministers. So deemed its contents would be the Chief Minister’s advice to the Governor, for which the Council of Ministers would be collectively responsible. The action taken thereon in pursuance of r. 8 of the Rules of Business made by the Governor under Art. 166(3) of the Constitution would then be the action of the Government. Here one (if the Under Secretaries to the Government of Punjab informed the appellant by his letter dated May, 1, 1957 that his representation "had been considered and rejected", evidently by the State Government. This would show that appropriate action had been taken under the relevant rule. The appeal is thus without substance and is dismissed. In view of the fact that the appellant is a displaced person with heavy responsibilities and with limited or possibly hardly any means we direct that the costs shall be borne by the parties concerned. Appeal dismissed.
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1962 (3) TMI 83 - MADRAS HIGH COURT
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... ... ..... each of the assessees undertook to discharge the debt and made himself personally liable to the company no doubt in substitution of the liability of the deceased to the companies. We would therefore hold on the special features of this case that the relevant date, the date of payment, to be taken into account for the purpose of ascertaining the accumulation of the profits of the companies is the date on which each of the assessees made himself personally liable to the companies. The questions are therefore answered in the following manner The department is entitled to treat as dividend within the meaning of section 2(6A)(e) read along with section 12(1B) of the Income-tax Act the amount of loan due by the assessee to the company on the date when he undertook to discharge that loan to the company to the extent of the accumulated profits of the company of that date. As the assessees have partly failed and partly succeeded there will be no order as to costs. Order accordingly.
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1962 (3) TMI 82 - CALCUTTA HIGH COURT
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... ... ..... authorities in Howard's case 1948 30 Tax Cas. 334. In my opinion the contention on behalf of the Commissioner does not challenge any finding of fact but assails the conclusion of the Tribunal on the ground that payment of pension to the wife is not incurred wholly and exclusively for the purpose of business. To my mind, it appears that the Tribunal was not justified in allowing the deduction inasmuch as there is no finding of fact to support the contention that payment of pension to Mr. Hook was incurred wholly and exclusively for the purpose of business and secondly, that the decision in Howard's case 1959 37 I.T.R. 66; 1959 Suppl. 2 S.C.R. 964 in an authority for the proposition that provision for payment of pension to the wife is not an expenditure for the purposes of trade For the following reasons, I reach the conclusion that the answer to the question is in the negative. The assessee is to pay costs. Certified for two counsel. Question answered in the negative.
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1962 (3) TMI 81 - MADRAS HIGH COURT
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... ... ..... onus of the year 1949 and the management agreed to pay bonus for the Deepavali 1950, only on June 30, 1951. Both these dates fell within the year of account of the assessee. The legal liability to pay bonus was, therefore, rightly, if we may say so with respect, held to have accrued only on the dates of the award and the agreement. In our opinion the assessee rightly claimed that this sum of ₹ 21,373 was a legally enforceable liability to pay the excise duty in consequence of the statutory demand by the excise authorities in the year of account relevant to the assessment year 1955-56. He was entitled to debit this amount on April 12, 1955, as an accrued liability on the basis of the mercantile method of accounting adopted by him. The disallowance of the claim by the department and by the Income-tax Appellate Tribunal is clearly erroneous in law. The question is answered in favour of the assessee who will get his costs from the department. Counsel's fee ₹ 250.
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1962 (3) TMI 80 - CALCUTTA HIGH COURT
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... ... ..... to charge irrespective of the question as to whether the income had actually found its. way into his pocket. In view of the above it cannot be held that the trading loss for the entire 'period from January 1, 1951, to December 31, 1951, and the amount of loss computed by the Income-tax Officer for the said period should be allowed in the hands of the assessee company. The assessee company can only have the benefit of the loss, if a any, incurred during the period commencing from the date of its incorporation ration to the end of the year 1951. The answer to the question "Whether, on the facts and in the circumstance of the case, the entire amount of loss related to the trading period from January 1, 1951, to December 31, 1951, as computed by the Income-tax Officer should be allowed in the hands of the assessee company?" must be in the negative and against the assessee who must pay the costs of this reference. LAIK J.- I agree. Question answered in the negative.
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1962 (3) TMI 79 - SUPREME COURT
Whether the High Court was correct in rejecting application for grant of a mining lease for manganese ore over an area comprising 5400 acres situated in the district of Keonjhar on the ground that it had no jurisdiction to deal with the matter under Art. 226 as the final order in the case was passed by the Central Government which was located beyond the territorial jurisdiction of the High Court?
Held that:- The High Court was right in holding that it had no jurisdiction to issue a writ under Art. 226 in the present case as the final order in this case was that of the Central Government which was not situate within the territories over which the High Court has jurisdiction. Appeal dismissed.
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1962 (3) TMI 78 - SUPREME COURT
Whether ss. 38(1) and (3)(b)(iii) make it mandatory for the High Court to pass an order winding up a banking company whenever the Reserve Bank under its powers or under an order of the Central Government makes an application for the winding up of a banking company?
Held that:- The Arbitration Act itself affords a readily available instance. Under that Act the Court passes its decree on an award of almost any one the parties may choose. Nor is the possibility of a mistake by the Reserve Bank of such vital consequence. If the Reserve Bank acts in good faith and with circumspection, there is as much or as little chance of error as before a Court of law. Lastly we do not think that this was a case in which some lesser action like moratorium or amalgamation or reconstruction would have been feasible. The difficulty of the Palai Bank was the nature of its advances, which were either not recoverable or not easily recoverable. A moratorium with the limitation of time involved in it would not have been an adequate measure, and amalgamation and reconstruction were out of question at the stage which had been reached.
We are thus satisfied that ss. 38(1) and (3)(b)(iii) of the Banking Companies Act are neither discriminatory nor unreasonable, and cannot be declared void under Arts. 14 and 19 of the Constitution. Since the provisions are manifestly in the public interest, they cannot also be declared ultra vires under Art. 301, because they are protected by Art. 302 of the Constitution. The appeal and the petition thus fail, and are dismissed
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1962 (3) TMI 77 - SUPREME COURT
Whether the question of construction to be Placed upon a decree was a substantial question of law?
Held that:- The proper test for determining whether a question of law raised in the case is substantial would, in our opinion, be whether it is of general public importance or whether it directly and substantially affects the rights of the parties and if so whether it is either an open question in the sense that it is not finally settled by this Court or by the Privy Council or by the Federal Court or is not free from difficulty or calls for discussion of alternative views. Applying the tests it would be clear that the question involved in this appeal, that is, the construction of the Managing Agency agreement is not only one of law but also it is neither simple nor free from doubt.
As rightly-pointed out by the High Court, were intended only to emphasise the fact that compensation will be computable at an amount not less than ₹ 6,000 p.m. Apparently, they thought it desirable to emphasise the point that the amount of ₹ 6,000 p.m. was regarded by' them as reasonable and intended that it should not be reduced by the court in its discretion.
When the remuneration and salary were equated in el. 12 nothing else was meant but ₹ 6,000/-and when the word salary was used in el. 14 we have no doubt that only that amount was meant and no other. It may be that under el. 10 the appellant was entitled to additional remuneration in case the profits were high upto a limit of 10% of the gross profits. That was a right to claim something over and above ₹ 6,000/-and could be characterized properly as additional remuneration and not fixed or normal remuneration which alone was apparently in the minds of the parties when they drew up el. 14. In our opinion, therefore, the High Court was right in the construction placed by it upon the clause. Appeal dismissed.
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1962 (3) TMI 76 - RAJASTHAN HIGH COURT
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... ... ..... le to tax at general rate. I have considered over the matter. The judgment of the Board of Revenue was binding on the appellate authority and, therefore, the appellate authority was justified in rectifying the order of appeal in view of the judgment of the Board of Revenue and as such the action of the Deputy Commissioner (Appeals) in rectifying the order is in accordance with law. Regarding the rate of tax, the matter has already been considered in Revision No. 141 of 1987 in the case of the assessee itself, wherein, it has been held by this Court that if a commodity is capable of being used for some other purpose then because of the use for such other purpose there cannot be any difference in the rate of tax and the levy of tax was upheld as that of the sewing thread and it was held that the tax cannot be levied at general rate. Following the same analogy, I am of the opinion that there is no substance in the revision petition, which is hereby dismissed. Petition dismissed.
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1962 (3) TMI 75 - SUPREME COURT
Evasion of duty on 11,606 maunds of sugar at the rate of Rs. 5-10-0 per cwt - Held that:- Appeal allowed. Not because an error due to carelessness in maintaining the registers properly as required by Rule 83 does not amount to a contravention of that rule; the only reason why we mention this is that in a factory where the turnover of sugar is so considerable and the operations conducted in which the human element plays a significent part it would not be right to base calculations on the surmise that over filling of the tanks was being practised systematically. No doubt, during the test, the tanks were slightly over filled on nine out of ten occasions as pointed out by the Assistant Chemical Examiner. But this could be att ributed to a slight failure of the human element resulting from the fact that a special operation was being conducted by the operators in the presence of a Government official. We would, however, make it clear that these observations are just incidental and are not the basis of our decision.
Quash the order of the Central Government and the two tribunals below as well as the directions requiring the appellant to pay the additional excise duty of Rs. 90,921-14-0 on 11,606 maunds of sugar and fine of Rs. 2,000. If the appellant has paid the duty and the penalty it should be refunded.
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1962 (3) TMI 74 - KERALA HIGH COURT
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... ... ..... oods effected by them be entitled to collect by way of tax any amount which a registered dealer effecting such sale would have been entitled to collect by way of tax under that Act. The combined effect of this provision and of section 5(vii) of the Act and the notification issued thereunder, as we read them, is to approximate the State to a registered dealer and to restrict the liability to taxation to a single occasion irrespective of the multiplicity of the sales in succession. 7.. It is common ground that at the time of the sale by the forest department to the respondent not merely the price but also the sales tax was as a matter of fact collected from the respondent. A second levy under any circumstance in respect of a single point tax is definitely unwarranted, and we must hold that the conclusion reached by the Tribunal is correct, and that this Tax Revision Case should be dismissed. We do so. 8.. The petitioner will pay the costs of the respondent. Petition dismissed.
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1962 (3) TMI 73 - MAHARASHTRA HIGH COURT
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... ... ..... eller, there can be no doubt whatsoever that the sale took place within the State of Bombay. It was neither a sale in the course of import, nor a sale which occasioned the import. The sale which occasioned the import may be the sale by the Cuban merchants to the applicants when the applicants purchased the stock of sugar before putting it on board for the purpose of importation to India. But it is not that sale, which is being taxed. The sale, which is being taxed, is the sale which has taken place at Bombay between the seller and the buyer and it is not that sale which has occasioned the import of the goods. In view of the conclusions arrived at by us, question No. 1 must be answered in the negative, question No. 2 in the affirmative and question No. 4 in the negative. For the reasons, which we have already stated, question No. 3 need not be answered and we accordingly do not answer the same. The applicants will pay the costs of the opponent. Reference answered accordingly.
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