9911796707
TMI Blog1971 (5) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... said F. W. Heilgers & Co. Ltd., as consideration for the purchase of the mines, veins, seams or seam strata layers, and beds of fireclay in the land of the mine called " Churulia Mine ". On the 13th July, 1944, a company called the New Churulia Coal Co. Ltd. was incorporated. On August 16, 1944, the assessee received a sum of Rs. 6,50,000 from the New Churulia Coal Co. Ltd. as consideration for the purchase of the coal mine. On January 5, 1945, the assessee sold the mines, veins, seams or seam strata layers and beds of fireclay in the coal mine to the New Churulia Coal Co. Ltd. at a price of Rs. 1,10,000. The conveyance for the sale of the mining rights was executed by the Churulia Coal Co. Ltd. on the 28th August, 1944. There was no d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived a sum of Rs. 6,50,000 from the assessee as consideration for the sale of the mine. About four months after the receipt of this money, says the Tribunal, a new company was incorporated in the name of New Churulia Coal Co. Ltd. on the 13th July, 1944. The Tribunal has inferred from the date of incorporation that the arrangement for incorporating the new company was made some time before that date. Immediately after the incorporation, the New Churulia Coal Co. Ltd. purchased the coal mine and paid the sum of Rs. 6,50,000 to the assessee. The conveyance was executed, the Tribunal points out, by the Churulia Coal Co. Ltd. directly in favour of the New Churulia Coal Co. Ltd. According to the Tribunal it was clear to the promoters of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court : " Whether, on the facts and in the circumstances of the case, the surplus amounting to Rs. 1,01,854 arising from the sale of the fireclay rights was taxable under the Indian Income-tax Act, 1922 ? " Mr. Debi Pal, learned counsel for the assessee, has argued before us that the Tribunal proceeds on the proposition that the purchase of mines, veins, seams or seam strata layers and beds of fireclay in the land cannot be detached from the purchase of coal mine. The Tribunal has failed to consider the purchase and sale of fireclay rights independently of the purchase and sale of the coal mine. This approach of the Tribunal, submits Mr. Pal, is a misdirection in law. There is no principle of law or assumption of fact that purchase of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the purchase and sale of the coal mine and the fireclay rights and on an appreciation of the totality of these transactions the authorities below have come to the conclusion : (a) that the purchase and sale of fireclay rights were purchase and sale of the assessee itself, and (b) the purchase and sale of fireclay rights were incidental to the purchase and sale of the coal mine. There is no doubt that the coal mine was purchased for the purpose of resale. The same purpose has been attributed to purchase and sale of fireclay rights as well. It seems to us that the Tribunal has made the correct approach to the facts of the instant case. Our answer to the question referred to us, therefore, is in the affirmative and in favour of the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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