9911796707
TMI Blog1966 (10) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... Horseman Brothers desired to dispose of their shareholding in the company, and to part with the managing agency. David Mitchell, a partner of Messrs. Lovelock and Lewis--accountants of the company--Rowan Hodge of Messrs. Orr Dignam & Co.--solicitors of the company--and the assessees started joint negotiations with Messrs. Horseman Brothers to purchase the controlling interest in the company. About the month of April, 1946, Messrs. Mangturam Jaipuria, acting through their partner, Anandram Gajadhar, were also negotiating to secure the controlling interest in the company. Messrs. Mangturam Jaipuria addressed a letter on April 29, 1946, to David Mitchell to the following effect: " With reference to your negotiations to acquire the controllin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital and not revenue receipt. The order was confirmed by the Appellate Assistant Commissioner. On the plea of the assessees that the amount of Rs. 2,00,000 received by them as consideration for agreeing to refrain from carrying on their business and was on that account not taxable as their income, and that in any event it was a non-recurring casual receipt, there was difference of opinion between the two Members who constituted the Appellate Tribunal, and the appeal was referred to a third Member who remanded the case for a finding on certain matters on which the order of the Appellate Assistant Commissioner was silent. The Appellate Assistant Commissioner then reported that the payment of Rs. 6,00,000 was not made only as an inducement t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt in question was a revenue receipt from a venture in the nature of trade. With special leave, the assessees have appealed to this court. Counsel for the assessees says that the two Members of the Tribunal who originally heard the appeal had concurrently held that Rs. 6 lakhs were paid to the assessees and their associates for dissuading them from competing with Messrs. Mangturam Jaipuria and it was not open to the third Member to ignore that finding and to arrive at a different conclusion. We are unable to agree with that contention. On a difference of opinion, the appeal in its entirety, and not any specific question, was referred to the third Member. Again only the Accountant Member was of the view that the receipt of Rs. 2 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how it was intended by the assessees to finance such a large transaction. The Tribunal was apparently of the view that a solicitor, an auditor and a firm of share-brokers and paper merchants could not have been associated in a genuine project of acquiring the controlling interest in one of the largest textile units in the country which was expected to and did cost Rs. 4 crores. The Tribunal had directed that certain persons including Ram Kumar Agarwalla, the principal partner of the assessees, be examined as witnesses. The principal partner of the assessees did not give evidence. Ramgopal Agarwalla, another partner of the firm, who appeared before the Appellate Assistant Commissioner pleaded that he had no personal knowledge about the deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid was not for carrying on business but for refraining from carrying on the business and was not taxable. In the Mills Store Co.'s case, under an agreement for a stated consideration, the assessee-company parted with the oil tanks and installations and other structures and goodwill and leasehold rights held by it in respect of the land on which its business of storing petroleum and petroleum products was carried, and agreed not to import petroleum for ten years, and not to act on behalf of any one else as importers of petroleum for five years. By another agreement, in consideration of extending the latter restriction to ten years, the assessee was paid Rs. 10,000 annually during the subsistence of the restriction. It was held by the Chief ..... X X X X Extracts X X X X X X X X Extracts X X X X
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