9911796707
TMI Blog1965 (10) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ri C. P. Sarathy Mudaliar 2,797 27,970 Sri C. P. Singaram 420 4,200 Sri C. P. Doraiswamy 500 5,000 The company was doing transport business and for the assessment year 1959-60 (previous year ending 31st March, 1959) it claimed a sum of Rs. 48,600 as development rebate in respect of the four new buses purchased by it and brought to use during the year. The Income-tax Officer disallowed the amount but the Appellate Assistant Commissioner, on appeal, allowed the entire sum of Rs. 48,600 as development rebate. On May 27, 1959, the three shareholders entered into a partnership and the capital of the firm was as follows : Rs. C. P. Sarathy Mudaliar 25,000 C. P. Singaram 10,000 C. P. Doraiswamy 10,000 -------------- Total 45,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2)(vib). The learned counsel for the appellant, Mr. Naunit Lal, has reiterated the same points before us. Section 10(2)(vib) and section 35(11) are in the following terms : " 10(2) Such profits or gains shall be computed after making the following allowances, namely :--- ...... (vib) in respect of a new ship acquired or new machinery or plant installed after the 31st day of March, 1954, which is wholly used for the purposes of the business carried on by the assessee, a sum by way of development rebate in respect of the year of acquisition of the ship or of the installation of the machinery or plant, equivalent to,---...... (ii) in the case of a ship acquired before the 1st day of January, 1958, and in the case of any machinery or pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transfer takes place or the money is so utilised." There is no doubt that on the true interpretation of section 10(2)(vib) it is clear that if an assessee sells to a person other than the Government at any time before the expiry of ten years from the end of the year in which the motor vehicle was acquired, the allowance is deemed to have been wrongly allowed for the purposes of the Act, but if the assessee sells it to the Government, no such consequence follows. The learned Additional Solicitor-General says that the object was to help in the development of industry; indeed the rebate was called "development rebate" ; and in order to achieve this object a condition was put that if the assessee did not utilise it in his own business, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further says that it is not a commercial transaction at all and what the latter part of section 10(2)(vib) contemplates is a commercial sale or transfer. In this connection he relies on Commissioner of Income-tax v. Sir Homi Mehta's Executors, Rogers & Co. v. Commissioner of Income-tax and Commissioner of Income-tax v. Mugneeram Bangur . In the first case the facts in brief were these. The assessee and his sons formed a private limited company and transferred to that company shares in several joint stock companies which the assessee had held jointly with his sons for Rs. 40,97,000 which was the market value of the shares at that time. It was found that these shares had cost to the assessee only Rs. 30,45,017 and the income-tax authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
