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TMI Blog1958 (3) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... lled service lines from some point on the mains to the consumers premises. The company has been laying these service lines each year and charging the consumers concerned the cost of laying the service lines and also something over and above that cost. Thus, during the accounting year ending the 31st March, 1948, which is relevant to this reference, the company received in all ₹ 12,530 from the consumers, while the actual cost of laying the service lines amounted only to ₹ 5,669. The question that arose during the assessment proceedings was whether the difference between the cost of laying the service lines and the charges received from the consumers on this account was taxable income. The Income-tax Appellate Tribunal has taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusion that the ownership of service lines vested in the consumers and not in the licensee. This decision followed the general rule that a person paying for a property is normally the owner of that. There is in the present case no particular evidence or indication to the contrary, and if we are to decide this question on the material as it is before us, I would be inclined to hold that these service lines as distinguished from the main lines are not the property of the company. If this view is correct, then Mr. Mahajan's argument that the company by laying these service-lines was adding something to their capital at once breaks down. Assuming, however, that Mr. Mahajan is right in maintaining that the service-lines are the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is, however, no dispute between the parties as to those principles, and it is admitted that the ultimate distinction must in each case turn on the actual facts concerning that case. It is in the circumstances unnecessary to enter into a discussion of those cases. It is, however, useful to remember that section 10 of the Indian Income-tax Act makes all profits and gains of "any business, profession or vocation taxable", and the only other provision in section 10 is that, while computing such profits, certain deductions can be made. It is not suggested that the present case would fall in the category of any of the permissible deductions under section 10, so that the real question before us merely is whether the receipts in questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt reported as Commissioner of Income-tax v. Poona Electric Supply Co. Ltd. [1946] 14 ITR 622 . A reference to the report of that case, however, shows that the facts were entirely different. In that case the electric supply company was not willing to supply electric energy to a particular area unless Government agreed to contribute towards the company's capital expenditure, which it was necessary to incur before electricity could be supplied. Government agreed to make the necessary contribution and the question arose whether that contribution represented ordinary business income or was a capital receipt. The court took the view that this payment was not ordinary business revenue. The important fact in the case was that the amount actual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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