Court : Mumbai
Decided on : Mar-22-1949
Reported in : AIR1950Bom1
..... not in the course of assessment under section 23, but it has been made under the special powers given to the income-tax officer under section 23a, and there is no provision in the income-tax act which lays down the period of limitation after which no order can be made under section 23a. therefore the order under ..... at rs. 48,586 for 1941-42, rs. 82,233 for 1942-43, and rs. 61,872 for 1943-44. the income-tax officer made an order under section 23a (1), income-tax act on 20th may 1946 for the previous year 1940-41 and on 18th may 1946 for the following two years that the sums of ..... to the third question, that question relates to the question of limitation and it is argued that the order made by the income-tax officer is barred under section 34 (2) of the act. under that sub-section, no order of assessment under section 23 can be made after the expiry of four years from the ..... as to the construction of the section itself, undoubtedly that would raise a question of law in respect of which we can exercise our advisory jurisdiction. the income-tax tribunal has construed the section, in our opinion, rightly, and, as i suggested in the earlier part of the judgment, the smallness of the profit has ..... 23a of the act. now, in my opinion, whether the losses incurred by the company in earlier years or the smallness of the profits made is such as to make the payment of a dividend or a larger dividend than that declared unreasonable, is one entirely for the satisfaction of the income-tax officer. it is .....Tag this Judgment!
Court : Mumbai
Decided on : Mar-25-1949
Reported in : AIR1950Bom45
..... re-formulate question 1 which will therefore, read as follows :'whether in the circumstances of the case the interest on borrowings, for the purpose of section 8, income-tax act, should be computed on the basis that investments were made proportionately out of capital and deposits?'6. we, will, therefore, answer question 1 in the affirmatives ..... two questions arise for our determination in this reference. one is with regard to the true effect of proviso 1 to section 8, income-tax act to the extent that it is applicable to the facts of this case. now, section 8 deals with one of the heads which are chargeable to ..... there are two decisions of two high courts which have taken conflicting views on this point. there is the decision of the madras high court reported in commissioner of income-tax, madras v. madras provincial co-operative bank ltd. i. l. r. (1943) mad. 390 : a.i.r. 1943 mad. 152. that court has ..... straightaway point out that this part of the proviso with which i am dealing is extremely clumsily drafted. the proviso suggests as if income-tax was payable on an outgoing but the true meaning--and that is not disputed--of this part of the proviso is that it contemplates a permissible deduction ..... the rest of the section is not material. then we come to proviso 1, and to the extent that it is material, it provides that no income-tax shall be payable in respect of any interest payable on money borrowed for the purpose of investment in the securities by the assessee. now, i might .....Tag this Judgment!
Court : Mumbai
Decided on : Mar-18-1949
Reported in : AIR1950Bom6
..... the tribunal and before us is that they were entitled to relief not only with regard to income-tax but also with regard to super-tax. the tribunal rejected the contention of the assessees, and thereupon a reference has been made to us under section 66 (1), income-tax act; and two questions have been framed by the tribunal for our consideration.4. now the first ..... of the assesses and refused to grant any relief either under section 25 (3) or section 25 (4) of the act.3. then the matter came before the income-tax tribunal. the income-tax tribunal took a different view from the view taken by the income-tax officer and they held that there was a succession to the business within the meaning of section 25 (4) on ..... assessment of this firm for the year 1942-43 a claim was made that the firm was entitled to relief both with regard to income-tax and super-tax under section 25 (3) and section 25 (4) of the act. the contention was that there was either a discontinuance or a succession within the meaning of either of these two sub-sections on 1st ..... payable in respect of the broken period contemplated by section 25 (4) of the act. the contention of the assessees before the income-tax officer was that they were entitled to relief both with regard to income-tax and super-tax. the income-tax officer came to the conclusion that the contention of the assessees was not well-founded and they were not entitled to any relief. all .....Tag this Judgment!
Court : Mumbai
Decided on : Mar-24-1949
Reported in : AIR1950Bom29
..... .j.1. the question that arises on this reference is whether a certain amount paid by an employer to his employees is a valid deduction under section 10 (2) (xv), income-tax act, 1922, and in order to determine it we have got to consider whether it is an expenditure laid out or expended wholly and exclusively for the purpose of the business ..... or not has to be considered. the excess profits tax act gives wider powers to the excess profits tax officer and that is that although a deduction may be permissible under the income-tax act, he may still disallow it under the excess profits tax act. but in this case as the deduction was disallowed under the income, tax act itself, no question arose of disallowing it under rule 12 ..... of schedule 1 of the act, and, therefore, no question as to the necessity of the permission of ..... to the requirements of the business of the assessee. the basis of the excess profits tax act is that substantially the very income which is liable to tax for income-tax is also liable to tax for excess profits tax under the excess profits tax act, and, therefore, in order to arrive at the total income of the assessee for both purposes the question whether deductions are permissible under section 10 .....Tag this Judgment!
Court : Mumbai
Decided on : Mar-25-1949
Reported in : AIR1950Bom61
..... such. now, i refuse to read clause (15) and (16) of the agreement as bringing about the same result as section 4, sub-clause (3), income-tax act. sir jamshedji has argued that the raja of phaltan was all powerful and that he combined in himself the executive, the legislature and even the judiciary, and therefore ..... a rupee on the net profits of the said sugar factory. in calculating the net profits the usual deductions in respect of depreciation etc., permissible under the income-tax act for the time being in force in phaltan state shall be allowed. now, as i read these two clauses, all that they mean is that although ..... there may be a liability on the company to pay tax under the income-tax act, the phaltan state agrees not to recover that tax from the assessee company for a period of ten years or, to put it in a different language, the company and the ..... of orders made by the appellate tribunal, and the advise that we have to tender is based upon the provisions of law as contained in the income-tax act. we are not functioning as a civil court dealing with contractual rights of parties, and i take the view that it is not open to us ..... to construe the income-tax act in the light of any agreement that was arrived at between the phaltan state and the assessee company. it may be that the assessee company has .....Tag this Judgment!
Court : Mumbai
Decided on : Sep-14-1949
Reported in : AIR1950Bom166; (1950)52BOMLR72; 18ITR407(Bom)
..... had accrued outside british india was capitalised and was brought into british india in the shape of capital and not in the shape of income, then that amount could not be taxed as income under the income-tax act. this case would only have application if mr. kolah can satisfy us that the profits which accrued in baroda in the books of account of the assessee ..... deemed to have been received in baroda and not merely to have accrued or arisen in baroda. that contention again is not sound, because the legislature has in the income-tax act drawn a clear distinction between accrual or arising of income and the receipt of income, and i see no reason why when accounts are kept on mercantile basis it must be held that ..... or advances made by the assessee to the partnership firm at penang be said to be income accruing or arising in british india within the meaning of s. 4(1), income-tax act ?(2) if the answer to the above question is in the negative and if the income is one accruing or arising without british india to a person resident in british india is ..... the income one received in british india so as to make it taxable under s. 4 read with .....Tag this Judgment!
Court : Mumbai
Decided on : Sep-19-1949
Reported in : AIR1950Bom198; (1950)52BOMLR94; 18ITR23(Bom)
..... on by these partners for the purpose of the indian income-tax act.'having reformulated that question we answer the question in the affirmative. with regard to the second question, we agree with the tribunal that it is a question of fact, and ..... and come to the conclusion whether the two businesses carried on by the partners in this case constituted two different firms or one firm for the purpose of the indian income-tax act.4. we will reformulate the first question submitted to us in the following terms:'whether in law common partners can constitute two separate firms in respect of different businesses carried ..... has taken of the law and we are of the opinion that there is nothing in law to preclude common partners constituting two separate firms for the purpose of the income-tax act. whether there are two firms or only one firm is a question of fact which can only be determined by the tribunal itself. as the tribunal has not determined the ..... who carry on the particular business. the tribunal is right that that is the correct position, under the ordinary law. but under the indian income-tax act, the position is different because a firm is recognised by the indian income-tax act as an assesses as much as an individual or a joint hindu family. it is a taxable unit, and even when a firm is .....Tag this Judgment!
Court : Mumbai
Decided on : Sep-15-1949
Reported in : AIR1950Bom264; (1950)52BOMLR402; 18ITR751(Bom)
..... of all the entries therein. the question, however, which arose before the madras high court was whether under the provisions of section 54, income-tax act, the income-tax officer could be called upon to produce these books even for the purpose of inspection thereof being taken by a partner of the partnership. gentle ..... or pin them and exclude them from the ken of the outsiders including the court for the purpose of satisfying the provisions of section 54 income-tax act. but barring the exclusion of those particular entries from those four books he would be bound to produce the same, and i direct ..... not at all relevant for the purpose of the inquiry before him. he would be justified in withdrawing from the court under section 54, income-tax act, those accounts and entries in books of account which were relevant for the purpose of the inquiry before him and which were thus brought to ..... in the course of the investigation were to be treated as confidential and would come within the ban of section 54, income-tax act. no doubt, in the ordinary way, the income-tax officer not knowing what particular entries or accounts would be relevant for the purpose of the investigation before him in the ..... side and inspection thereof by them. if, however, the matter was pressed to the production of these books in court notwithstanding the provisions of section 54, income-tax act, he urged that having regard to the two cases, one of our high court reported in emperor v. osman chotani : 10itr429(bom) , .....Tag this Judgment!
Court : Chennai
Decided on : Dec-05-1949
Reported in : AIR1951Mad506; 18ITR586(Mad); (1950)2MLJ353
..... of himself and his two minor sons, chocka-lingam and meyyappan. daring the assessment year 1940-41, the assessee applied under section 25-a, income-tax act, for an order recording a partition which had taken place among the members of the family. the family was assessed till that date as an undivided ..... not the owner of the properties in their entirety. the question therefore is whether the partition so made satisfies the requirements of section 25-a, income-tax act. the question formulated by the appellate tri-bunal really covers more than one contention raised on behalf of the assessee, and the appel-lates ..... whether in the circumstances of the case the finding of the appellate tribunal that there has been no partition within the meaning of section 25-a, income-tax act is right?'this comprises and compresses the following four questions : (1) whether by the deed of partition dated 5-4-1940, a partition has ..... division may only be possible in the boons.'in a later case of the bombay high court, it was held that for purposes of the income-tax act, a joint family in spite of a severance of status, continues to exist as a unit or entity till all the properties belonging to the ..... entries would be enough.31. as a result of the foregoing discussion, i arrived at the following conclusions: section 25a, income-tax act, provides the machinery for computing and assessing the income of a joint hindu family which existed during the year of account but has ceased to exist during or prior to the .....Tag this Judgment!
Court : Chennai
Decided on : Nov-18-1949
Reported in : AIR1951Mad551; 18ITR333(Mad)
..... further held that the right to receive payment in respect of the contracts arose in british india; and that for these reasons the respondent company could be assessed under the income-tax act, as resident in british india. the tribunal differed from these conclusions. the contract according to them was concluded at the place where the acceptance note was signed by the company ..... been found and is accepted before us in the course of the arguments, is not within british india but is in cochin state, though the income-tax act has been applied to the railway line.4. the income-tax officer and the appellate assistant commissioner were of opinion that the company is resident in british india as the profits of the business accrued and had ..... in cochin and doing business there, it was resident in british india in the year of account within the meaning of section 4a (c), income-tax act as its income arising in british india in that year exceeded its income arising outside. therefore its entire profits and gains whether accruing or arising in british india or outside in the yearof account would be taxable under ..... was outside british india. the appeal was, therefore, allowed by the appellate tribunal and the reference was made by them tothis court on the application of the commissioner of income-tax.5. the liability to pay income-tax under the income-tax act arises by reason of the receipt of income, profits and gains, from whatever source derived, in british india in the year of account or the .....Tag this Judgment!