Mumbai Court March 1951 Judgments
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Keshrichand Bhanabhai Vs. Commissioner of Income-tax, Bombay City
Court: Mumbai
Decided on: Mar-30-1951
Reported in: [1951]20ITR201(Bom)
Chagla, C.J. 1. The question that arises on this reference is whether the assessee is entitled to set off a certain loss against the profits made by it in the year 1942-43 under Section 24(2) of the Income-tax Act. 2. The assessee is a firm and it consists of four partners and it appears that these four partners constituted an undivided Hindu family. In the assessment year 1941-42 a decision was given by the Income-tax officer under Section 25A that this Hindu undivided family was disrupted on the first day of Kartik Sudi of Samvat year 1997, which corresponds to 22nd November, 1940. This decision was based upon a partition deed which was executed on that date. The contention of these four coparceners was that the disruption took place really on the 11th November, 1939, and not on the 22nd November, 1940. That contention was rejected and, as I said before, the Income-tax Officer came to the conclusion that the disruption took place on the first day of Kartik Sudi Samvat year 1997. Now ...
Keshrichand Bhanabhai Vs. Commr. of I.T.
Court: Mumbai
Decided on: Mar-30-1951
Reported in: AIR1951Bom421; (1951)53BOMLR606
Chagla, C.J. 1. The question that arises on this reference is whether the assessee is entitled to set off a certain loss against the profits made by it in the year 1942-43 under Section 24 (2) of the Indian In some-tax Act. 2. The assessee is a firm and it consists of four partners, and it appears that these four partners constituted an undivided Hindu family. In the assessment year 1941-42 a decision was given by the Income tax Officer under Section 25A that this Hindu undivided family was disrupted on the first day of Kartik Sudi of Samvat year 1997, which corresponds to November 22, 1940. This decision was based upon a partition deed which was executed on that date. The contention of these four coparceners was that the disruption took place really on November 11, 1939, and not on November 22, 1940. That contention was rejected and, as I said before, the Income-tax Officer came to the conclusion that the disruption took place on the first day of Kartik Sudi Samvat year 1997. Now in t...
Commissioner of Income-tax Vs. the Century Spg. and Mfg. Co., Ltd.
Court: Mumbai
Decided on: Mar-29-1951
Reported in: [1951]21CompCas276(Bom); [1953]24ITR499(Bom)
Chagla, C.J. 1. This reference raises a question under the Business Profits Tax Act. The assessee company is the Century spinning and ., and its balance sheet for the year 1945 shows that it made a profit of Rs. 90,44,677. This profit was appropriated by a certain amount being paid for dividend and certain amounts being set aside for depreciation and other funds. Under this heading amounts were set aside for machinery, for buildings, for provision for taxation and for compulsory excess profits tax deposit; and a sum of Rs. 5,08,637 was carried over as balance to the balance sheet. Now the question that falls to be determined is whether this sum of Rs. 5,08,637 can be called a reserve for the purpose of Rule 2(1) in Schedule II of the Business Profits Tax Act. That Rule provides that 'Where a company is one to which clause (a) of Rule 3 of Schedule I applies, its capital shall be the sum of the amounts of its paid up share capital and of its reserves in so far as they have not been allo...
Mahomedally Tajbhoy Vs. Commissioner of Excess Profits Tax
Court: Mumbai
Decided on: Mar-29-1951
Reported in: [1951]20ITR274(Bom)
Chagla, C.J. 1. This reference raises a very short question as to the procedure to be followed by the Excess Profits Tax Officer when he exercises the power conferred upon him under Section 10A of the Act. The assessee was carrying on three business. On the 19th of May, 1941, he started a new business in the name and style of National Cotton Products. On the 16th October, 1943, a company called National Cotton Products Ltd. was incorporated which took over the business previously done by the National Cotton Products. The assessee also started a partnership business in the name of Yusuf Brothers. Yusuf Brothers were the managing agents of the National Cotton Products Ltd. The shareholders in the limited company and the partners in the managing agents' firm were all close relations of the assessee. The Excess Profits Tax Officer held that the flatting of the limited company and the setting up of the partnership business were all done with a view to avoid or reduce his liability to excess...
Ratilal Nathalal Vs. Commissioner of Income-tax
Court: Mumbai
Decided on: Mar-29-1951
Reported in: AIR1951Bom201; [1951]20ITR307(Bom)
Chagla, C.J.1. A rather interesting question arises on this reference as to the correct interpretation of Section 16(1)(c) and provisos 1 and 2 to that clause. There was a joint and undivided Hindu family consisting of one Ramjibhai, his son Ratilal, his daughter Pushpa and his wife Kamlawanti. On the 27th of July, 1933, a trust deed was executed with regard to a property belonging to the joint family which was executed by Ramjibhai and Ratilal. The effect of this trust deed was that the income of this property was to be enjoyed by Ramjibhai during his lifetime; after his death the income was to be enjoyed by Ratilal and certain right of residence was given to Kamlawanti. After the death of Ratilal the income was to be enjoyed by his widow and the sons of Ratilal who were in existence at the time of the death of the survivor of Ramjibhai and Ratilal. There was a power of revocation given to Ramjibhai. Ramjibhai died on the 23rd of July, 1940. After his death Ratilal enjoyed the same st...
Ratilal Nathalal Vs. Commissioner of Bombay
Court: Mumbai
Decided on: Mar-29-1951
Reported in: AIR1952Bom201; (1951)53BOMLR595; [1954]25ITR426(Bom)
Chagla, C.J. [1] A rather interesting question, arises on this reference as to the correct interpretation of Section 16(l)(c) and provisos 1 and 2 to that clause. There was a, joint and undivided Hindu family consisting of one Ramjibhai, his son Ratilal, hia daughter Pushpa and his wife Kamlawanti. On 27th July 1933, a trust-deed was executed with regard to a property belorging to the joint family which was executed by Ramjibhai and Ratilal. The effect of this trust deed, was that the income of this property was to be enjoyed by Ramjibhai during his lifetime; after his death, the income was to be enjoyed by Ratilal and certain right of residence was given to Kamlawanti. After the death of Ratilal the income was to be enjoyed by his widow and the sons of Ratilal who wore in existence at the time of the death of the survivor of Ramjibhai and Ratilal. There was a power of revocation given, to Ramjibhai. Ramjibhai died on 23-7-1940 After his death Ratilal enjoyed the income of his property...
Mahommedally Tajbhoy Vs. Commissioner of E.P. Tax
Court: Mumbai
Decided on: Mar-29-1951
Reported in: AIR1951Bom416a; (1951)53BOMLR600
Chagla, C.J.1. This reference raises a very short question as to the procedure to be followedby the Excess Profits Tax Officer when he exercises the power conferred upon him under Section 10A of the Excess Profits Act. The assessee was carrying on three businesses. On May 19, 1911, he started a new business in the name and style of National Cotton Products. On October 16, 1943, a company called National Cotton Products, Ltd., was incorporated which took over the business previously done by the National Cotton Products. The assessee also started a partnership business in the name of Yusuf Bros. Yusuf Bros, were the managing agents of the National Cotton Products, Ltd. The shareholders in the limited company and the partners in the managing agents' firm were all close relations of the assessee. The Excess Profits Tax Officer held that the floating of the limited company and the setting up of the partnership business were all done with a view to avoid or reduce his liability to excess pro...
Commissioner of Income-tax Vs. Century Spg. and Mfg. Co. Ltd.
Court: Mumbai
Decided on: Mar-29-1951
Reported in: AIR1951Bom420; (1951)53BOMLR603; ILR1952Bom585
Chagla C.J. 1. This reference raises a question under the Business Profits Tax Act. The assessee company is the Century Spinning & ., and its balance sheet for the year 1945 shows that it made a profit of Rs. 90,44,677. This profit was appropriated by a certain amount being paid for dividend and certain amounts being set aside for depreciation and other funds. Under this heading amounts were set aside for machinery, for buildings, for provision for taxation and for compulsory Excess Profits Tax deposit; and a sum of Rs. 6,08,637 was carried over as balance to the balance sheet. Now the question that falls to be determined is whether this sum of Rs. 5,08,637 can be called a reserve for the purposes of Rule 2(1) in Schedule II of the Business Profits Tax Act, That rule provides that 'Where the company is one to which Clause (a) of Rule 3 of Schedule I applies, its capital shall be the sum of the amounts of its paid up share capital and of its reserves in so far as they have not been allo...
Jamnadas Prabhudas Vs. Commissioner of Income-tax, Bombay City
Court: Mumbai
Decided on: Mar-28-1951
Reported in: [1951]20ITR160(Bom)
Chagla, C.J.1. In this reference we are concerned with a lease executed by the assessee on the 30th May, 1940, by which he gave a rent farming contract to a particular party and under that contract he received a sum of Rs. 14,000 per month in respect of the various properties covered by the rent farming contract. The question that the Tribunal has raise don this reference is whether the assessee is entitled to claim the sum paid as municipal property tax under Section 9(1)(iv) of the Indian Income-tax Act and the sums paid as urban property tax under either Section 9(1) (iv) or Section 9(1)(v) of the Act 2. Now this Court has taken the view that these amounts are not permissible deductions under Section 9 of the Act. The Supreme Court took a different view and came to the conclusion that they were permissible deductions. Therefore, if nothing more had happened and if the judgment of the Supreme Court had stood, we would have been bound to answer this question in favour of the assessee....
Jamnadas Prabhudas Vs. Commr. of Income-tax
Court: Mumbai
Decided on: Mar-28-1951
Reported in: AIR1951Bom438; (1951)53BOMLR590; ILR1952Bom590
Chagla, C.J. 1. In this reference we are concerned with a lease executed by the assessee on 30-5-1940, by which he gave a rent-farming contract to a particular party & under that contract he received a sum of Rs. 14,000 per month in respect of the various properties covered by the rent-farming contract. The question that the Tribunal has raised on this reference is whether the assessee is entitled to claim the sums paid as municipal property tax under Section 9 (1) (iv), Income-tax Act & the sums paid as urban property tax under either Section 9 (1) (iv) or Section 9 (1)(v) of the Act 2. Now this Court has taken the view that these amounts are not permissible deductions under Section 9 of the Act, New Piece Goods Bazar Co., Ltd. Bombay v. Commr. of Income-tax 49 Bom. L. R. 620. The Supreme Court took a different view & came to the conclusion that they were permissible deductions : New Piece Goods Bazar Go Ltd., v. Gommr. of Income-tax, Bombay 52 Bom. L. R. 764. Therefore, if nothing mo...
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