Mumbai Court March 1949 Judgments
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Jethabhai Hiraji and Co. Vs. Commissioner of Income-tax
Court: Mumbai
Decided on: Mar-24-1949
Reported in: AIR1950Bom29
Chagla, C.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 of the assessee. The assessee employed two persons by the name of Jamnadas and Purshottamdas to attend to a branch business of his. Jamnadas was employed in samvat year 1993 on a salary of RS. 125, and Purshottamdas was employed in samvat year 1995 on a salary of Rs. 111. On 1st September 1940, the assessee agreed to pay to each of these employees a commission of 20 per cent. on the net profits of the branch in addition to their respective salaries, and pursuant to this agreement each of the employees was paid Rs. 6000 in the year of account. The Income-tax Officer considered the claim and allowed only a sum of Rs. 1000 in all for both the e...
Punjabhai Dipchand Vs. Commissioner of Excess Profits Tax
Court: Mumbai
Decided on: Mar-24-1949
Reported in: AIR1949Bom415; (1949)51BOMLR715
M.C. Chagla, C.J.1. By this reference the assessee seeks to challenge an order made by the Excess Profits Tax Officer under Section 10A of the Excess Profits Tax Act. The assessee is a firm carrying on business at Ahmedabad in piece-goods, and the partners of the firm are one Punjabhai Dipchand and Goculdas Chhotalal. On June 28, 1941, another firm of the same name was started at Jorawarnagar in the Wadhwan State, which is an Indian State, and in that firm Punjabhai and Goculdas were partners and there was also a third partner by the name of Chunilal Tribhovan. This firm made certain profits, and the question is whether the profits of this firm are liable to payment of excess profits tax.2. Now, Section 5 of the Act which deals with the application of the Act contains a special exception in the case of business done in an Indian State, and it expressly provides that the Act shall not apply to any business the whole of the profits of which accrue or arise in an Indian State. It is not d...
Jethabhai Hirji and Co. Vs. the Commissioner of Income-tax
Court: Mumbai
Decided on: Mar-24-1949
Reported in: (1949)51BOMLR708
M.C. Chagla, C.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) of the Indian 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 of the assessee. The assessee employed two persons by the name of Jamnadas and Purshottamdas to attend to a branch business of his. Jamnadas was employed in samvat year 1993 on a salary of Rs. 125, and Purshottamdas was employed in samvat year 1995 on a salary of Rs. 111. On September 1, 1940, the assessee agreed to pay to each of these employees a commission of 20 per cent, on the net profits of the branch in addition to their respective salaries, and pursuant to this agreement each of the employees was paid Rs. 6,000 in the year of account. The Income-tax Officer considered the claim and allowed only a sum of Rs. 1,000 i...
Pujabhai Dipchand Vs. Commissioner of Excess Profits Tax, Bombay Mofus ...
Court: Mumbai
Decided on: Mar-24-1949
Reported in: [1949]17ITR482(Bom)
CHAGLA, C.J. - By this reference the assessee seeks to challenge an order made by the Excess Profits Tax Officer under Section 10A of the Excess Profits Tax Act. The assessee is a firm carrying on business at Ahmedabad in piece-goods, and the partners of the firm are one Pujabhai Dipchand and Goculdas Chhotalal. On the June 28, 1941, another firm of the same name was started at Jorawarnagar in the Wadhwan State, which is an Indian State, and in that firm Pujabhai and Goculdas were partners and there was also a third partner by the name of Chunilal Tribhovan. This firm certain profits and the question is whether the profits of this firm are liable to payment of excess profits tax.Now, Section 5 of the Act which deals with the application of the Act contains a special exception in the case of business done in an Indian State, and it expressly provides that the Act shall not apply to any business the whole of the profits of which accrue or arise in an Indian State. It is not disputed in t...
Jethabhai Hirji and Co. Vs. Commissioner of Income Tax, Bombay City.
Court: Mumbai
Decided on: Mar-24-1949
Reported in: [1949]17ITR533(Bom)
CHAGLA, C.J. - The question that arises on this reference is whether a certain amount paid by an exployer to his employees is a valid deduction under Section 10(2)(xv) of the Indian 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 of the assessee. The assessee employed two persons by the name of Jamnada and Purshottamdas to attend to a branch business of his. Jamnadas was employed in Samvat year 1993 on a salary of Rs. 125, and Purshottamdas was employed in Samvat year 1995 on a salary of Rs. 111. On the September 1, 1940, the assessee greed to pay to each of these employees a commission of 20 per cent. on the net profits of the branch in addition to their respective salaries, and pursuant to this agreement each of the employees was paid Rs. 6,000 in the year of account. The Income tax Officer considered the claim and allowed only a sum of Rs. 1,000 in all ...
Devkaran Nanjee Banking Co., Ltd. Vs. Commissioner of Excess Profits T ...
Court: Mumbai
Decided on: Mar-24-1949
Reported in: [1950]18ITR47(Bom)
CHAGLA, C.J. - The assessee is the Devkaran Nanjee Banking Co., Ltd., and the questions that arise for our consideration deal with the construction of certain provision of the Excess Profits Tax Act (XY of 1940), and the first question that we have to consider is whether the assessee bank is entitled to the benefit conferred upon assessees under Rule 5 of Schedule I to the Act. Schedule I contains rules for the and under Rule 2 of that Schedule, any borrowed money and debts shall be deducted for the purposes of computing the average amount of capital. Therefore, if the bank borrowed any moneys, those moneys could not go to the increase of the average amount of capital used by the bank. But there is an exception contained in rule 5 of schedule I, and that exception is that notwithstanding the provisions of rule 2 of Schedule II the amount of loan or debentures from a bank carrying on a bona fide banking business or effected by means of a public issue of debentures secured on the propert...
The Commissioner of Income-tax (Central) Vs. Nazir and Sons
Court: Mumbai
Decided on: Mar-23-1949
Reported in: (1949)51BOMLR696
M.C. Chagla, C.J.1. The question that arises in this reference is whether the assessees are liable to pay a certain penalty imposed upon them by the Income-tax Officer under Section 28 of the Act.2. The facts which led up to this reference may be briefly stated. On January 16, 1940, the Income-tax Officer issued a notice under Section 22, Sub-section (4), of the Indian Income-tax Act, for production of certain accounts and documents. The assessees failed to comply with that notice. The assessment of the assessees was completed by the Income-tax Officer on February 8, 1940. In completing the assessment a note was made by the Income-tax Officer that proceedings should be taken against the assessees under Section 28(1)(a) and (h). On February 17, 1940, pursuant to that note, a notice was issued by the Income-tax Officer under Section 28 of the Act. Now when the assessment of the assessees was completed, they were not registered as a firm; but on October 12, 1940, the Income-tax Commission...
The Comissioner of Income-tax Vs. the Kolhia Hirdagarh Co., Ltd.
Court: Mumbai
Decided on: Mar-23-1949
Reported in: (1949)51BOMLR699; [1949]17ITR545(Bom)
M.C. Chagla, C.J.1. This reference raises a rather difficult and debatable question whether a certain payment made by the assessee was in the nature of a capital or revenue expenditure. The assessee is the Kolhia Hirdagarh Company, Limited, Bombay. Rai Bahadur Seth Goverdhandas acquired certain mining rights from the Central Provinces Government in 1922, and on September 14, 1939, an agreement was arrived at between Rai Bahadur Goverdhandas and Messrs. Choonilal Manilal, Ltd., for the sale of all the rights that Goverdhandas had to Messrs. Choonilal Manilal, Ltd. By this agreement the consideration that was fixed for the purchase of these rights by Choonilal Manilal, Ltd., was the payment of a sum of Rs. 75,000 in cash to Goverdhandas and the giving of fully paid up shares of the face value of Rs. 25,000 to Goverdhandas and the minimum annual dividend (including its share of income-tax and super-tax) of four annas for every ton of coal raised. Messrs. Choonilal Manilal purchased these ...
Commissioner of Income-tax (Central) Vs. Nazir and Sons
Court: Mumbai
Decided on: Mar-23-1949
Reported in: AIR1950Bom28
Chagla, C.J.1. The question that arises in this reference is whether the assessees are liable to pay a certain penalty imposed upon them by the Income-tax Officer under Section 28 of the Act.2. The facts which led up to this reference may be briefly stated. On 16th January 1940, the Income-tax Officer issued a notice under Section 22, Sub-section (4), Income-tax Act, for production of certain accounts and documents. The assessees failed to comply with that notice. The assessment of the assessees was completed by the Income-tax Officer on 8th February 1940. In completing the assessment, a note was made by the Income-tax Officer that proceedings should be taken against the assessees under Section 28(1)(a) and (b). On 17th February 1940, pursuant to that note, a notice was issued by the Income-tax Officer under Section 28 of the Act. Now when the assessment of the assessees was completed, they were not registered as a firm; but on 12th October 1940, the Income-tax Commissioner made the or...
Commissioner of Income-tax Vs. Kolhia Hirdagarh Co. Ltd.
Court: Mumbai
Decided on: Mar-23-1949
Reported in: AIR1950Bom51
Chagla, C.J.1. This reference raises a rather difficult and debatable question whether a certain payment made by the assessee was in the nature of a capital or revenue expenditure. The assessee is the Kolhia Hirdagarh Company, Limited, Bombay. Rai Bahadur Seth Goverdhandas acquired certain mining rights from the Central Provinces Government in 1922, and on 14th September 1939 an agreement was arrived at between Rai Bahadur Goverdhandas and Messrs. Choonilal Manilal, Ltd., for the sale of all the rights that Goverdhandas had to Messrs. Choonilal Manilal, Ltd. By this agreement the consideration that was fixed for the purchase of these rights by Choonilal Manilal, Ltd., was the payment of a sum of Rs. 75,000 in cash to Goverdhandas and the giving of fully paid up shares of the face value of Rs. 25,000 to Goverdhandas and the minimum annual dividend (including its share of income-tax and super-tax) of four annas for every ton of coal raised. Messrs. Choonilal Manilal purchased these right...
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