TMI Blog1954 (8) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... l the account were kept in one set of books. In the year of account the assessee sold his rice mills for a sum of ₹ 23,500. The machinery had been purchased for a sum of ₹ 25,000 and at the beginning of the assessment year the written down value of the machinery was ₹ 1,190. The Income Tax Officer, therefore, proceeded to make an assessment under section 10(2)(vii) of the Income Tax Act upon the difference between the written down value of the machinery and the actual sale price. The assessee took an appeal to the Appellate Assistant Commissioner but the appeal was dismissed. The assessee then appealed to the Appellate Tribunal and it was argued on his behalf that the rice milling business ceased to be carried on with effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peration of section 10(2)(vii) it was necessary that the assessee should have used the machinery and plant for at least a part of the accounting year. In the present case there is no finding of the Income Tax authorities that the rice mill was used for any part of the accounting year, and, therefore, the surplus realised by the assessee out of the sale of the machinery was not chargeable under section 10(2)(vii) of the Indian Income Tax. In support of his argument learned counsel relied upon the decision of the Supreme Court in Liquidators of Pursa Limited v. Commissioner of Income Tax, Bihar. It was held by the Supreme Court in that case that in order to attract the operation of section 10(2)(vii) of the Indian Income Tax Act the machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was carried on but nevertheless the assessee was liable to pay Income Tax upon the excess sale proceeds of the machinery since it was carrying on the other business of commissioner agency. We must take it, therefore, that the finding of the Appellate Tribunal was that for no part of the accounting year did the assessee carry on the business of rice milling. To put it differently, the finding of the Appellate Income Tax Tribunal must be taken to mean that for no part of the accounting year the machinery of the rice mill was used. Upon this finding of fact, it is clear that the principle of the decision of the Supreme Court applies to this case and the amount of ₹ 22,310 which is the excess amount realised from the sale of machinery o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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