9911796707
TMI Blog1969 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... of Milkhiram Bros. He was being assessed from the year 1945-46 onwards. On October 31, 1946, he secured a contract for the purchase of approximately 1,28,499 parachutes from the Tata Aircraft Ltd. The parachutes belonged to the Government of India and the Tata Aircraft Ltd. was acting as the agent of the Government. The agreed purchase price of the parachutes was approximately Rs. 93 1/2 lakhs. The contract was entered into by means of letters. The assessee addressed a letter dated October 29, 1946, to Tata Aircraft Ltd. containg an offer. Tata Aircraft Ltd. sent a reply dated November 1, 1946, confirming the sale on the terms and conditions given in that letter. The assessee had to make a deposit by way of earnest money of a sum of Rs. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it was a capital payment. The aforesaid firm appealed to the Tribunal which held that only a payment of Rs. 1,87,000 had been proved to have been made to the assessee. For the assessment year 1947-48 the Income-tax Officer reopened the assessment of the assessee under section 34 of the Income-tax Act, hereinafter called " the Act ", on the ground that the income of Rs. 3,00,000 had escaped assessment. The assessee contended that only a sum of Rs. 1,87,000 had been received by him and not Rs. 3,00,000. The Tribunal decided that point in his favour in appeal after he had failed before the Appellate Assistant Commissioner. The assessee's contention before the Tribunal was that the nature of the receipt of Rs. 1,87,000 was capital and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That sum, therefore, represented a receipt for transferring the benefits of the contract entered into by the assessee in the ordinary course of the business. On behalf of the assessee, who is the appellant before us, it is submitted that the sum of Rs. 1,87,000 received by him could not be regarded as income. The agreement which had been entered into by the appellant with M/s. Tata Aircraft Ltd. was a capital asset or a source of possible income and the transfer which was made was not of the goods which were to be acquired under the contract but the source of income itself, namely, the appellant's share, right, title and interest were transferred. The second contention which was also raised before the High Court is that the amount in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely. M/s. Nathumal Nihalchand, Pokhraj Hirachand and others agreed to pay that amount to M/s. Tata Aircraft Ltd. It must be remembered that it was the appellant who had entered into the contract with M/s. Tata Aircraft Ltd. in respect of the purchase of parachutes. When he agreed to accept a sum of Rs. 1,87,000 from the aforesaid persons as consideration for transferring the benefits of the contract the appellant can well be said to have concluded a deal which represented the profit which he anticipated by acquiring the parachutes. It has been submitted on behalf of the appellant that he was not carrying on the business of transferring or selling the benefits of contracts and therefore the contract entered into with M/s. Tata Aircraft Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
