Mumbai Court March 1952 Judgments
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Harakchand Makanji and Co. Vs. Commissioner of Income-tax, Bombay
Court: Mumbai
Decided on: Mar-31-1952
Reported in: [1952]22ITR33(Bom)
Chagla, C.J.1. The assessee has been held to be an agent of Harkisondas Khushal who is a person residing in Port Sudan. It appears that in S.Y. 1999, which is the previous year for the assessment year 1944-45, the assessee shipped to Port Sudan to his foreign principal goods of the value of Rs. 16,65,708. In the course of the shipment goods of the value of Rs. 3,09,420 which were carried on S. S. Rehmani were totally lost as the ship was sunk. The Tribunal has determined the result of the business transaction in the following manner. It has calculated the net profit on the goods sent to Port Sudan at the rate of 15%. It has deducted Rs. 3,09,420 from Rs. 16,65,708 and on the balance at the rate of 15% the resulting amount is Rs. 2,03,445. This is the results of goods sent from British India being sold in the Port Sudan. Against this the Tribunal has set off the loss of Rs. 3,09,420 caused to the principal by the goods on S. S. Rehmani being lost and therefore the Tribunal has arrived a...
Jamnadas Prabhudas Vs. Commissioner of Income-tax, Bombay City
Court: Mumbai
Decided on: Mar-31-1952
Reported in: AIR1952Bom479; (1952)54BOMLR609; ILR1953Bom549; [1952]22ITR150(Bom)
Chagla, C.J.[1] This is an application for leave to appeal to the Supreme Court. This matter came before us on an earlier occasion and we held that under Section 66A(2), Income-tax Act it was not a fit case for appeal to the Supreme Court. It is now sought to be contended by Sir Jamshedji Kanga that he has a right of appeal under Article 133(1)(a) and (b) of the Constitution inasmuch as the amount or value of the subject-matter is not less than RS. 20,000, or in the alternative, that the judgment, decree or final order involves directly or indirectly some claim or question respecting property of not less than Rs. 20,000.[2] In our opinion, it is clear that neither Article 133(1)(a) nor (b) can apply to a judgment given by this Court on a reference made under the Income-tax Act. It is clear that as far as Article 133(1)(a) is concerned, it requires that the amount or value of the subject-matter of the dispute in the Court of first instance and still in dispute on appeal was and is not l...
Umarbhai Chandbhai Vs. Commissioner of Income-tax, Bombay City
Court: Mumbai
Decided on: Mar-28-1952
Reported in: [1952]22ITR27(Bom)
Chagla, C.J.1. This reference arises out of the refusal of the Income-tax authorities to register a partnership deed under Section 26A of the Income-tax Act. It is open to the authorities to refuse to register a partnership deed, if there is no partnership in law and even if there is a partnership in law if the partnership is not a genuine partnership. Sir Jamshedji has emphasized the fact that it is open to person to enter into a legal partnership in order to avoid payment of tax. That may be so; but there must be contractual relationship between the persons which in law would constitute a partnership. If there is no partnership in law then the further question whether although the document was executed it was merely an ostensible document and it fact the parties never acted as partner would not arise. 2. Now, in this case the partnership is between Mahomed Umar and his two sons, and the question is whether on the terms of the document itself it can be stated that in law there was a p...
Narayandas Kedarnath Vs. Commissioner of Income-tax, Central
Court: Mumbai
Decided on: Mar-28-1952
Reported in: [1952]22ITR18(Bom)
Chagla, C.J.1. The question that arises on this reference is whether certain amounts standing to the credit of some of the partners of the assessee firm can be treated as the undisclosed profits of the firm itself. The facts giving rise to the reference are : that a some of Rs. 2,30,600 was brought in the assessment year 1940-41 by six partners of the assessee firm, and a further sum of Rs. 40,647 was brought in by five partners in the assessment year 1941-42. It has been found as a fact by the Tribunal that these amounts were actually brought in from Jaipur by means of drafts of the Imperial Bank of India, Jaipur. Therefore, we start with this position that these amounts do not represent fictitious entries but they represent actual cash received by firm through some of his partners. Now These partners were called upon to explain how these moneys were available to them in Jaipur and how they managed to get these moneys to the credit of the assessee firm, and we accept the Tribunal's fi...
Raja Bahadur Mukundlal Bansilal Vs. Commissioner of Income Tax, Bombay ...
Court: Mumbai
Decided on: Mar-28-1952
Reported in: (1952)54BOMLR576; [1952]22ITR94(Bom)
Chagla, C.J.1. This reference raises a question as to the interpretation of Section 10(2)(xi) of the Income-tax Act. We entirely agree with the Tribunal when it takes the view that this particular clause has not been very happily drafted. If anything, the Tribunal has used very moderate language in considering the wording used by the Legislature. But we have to construe it as we find it and when we turn to that clause it deals with a deduction under Section 10(2); and the deduction in case of a person who is doing business, and whose accounts are not kept on cash basis, is 'such sum in respect of bad and doubtful debts... as the Income-tax Officer may estimate to be irrecoverable, but not exceeding the amount actually written off as irrecoverable in the books of the assessee.' It is difficult to understand what distinction is sought to be made between bad and doubtful debts; but the difficulty and ambiguity is cleared by the fact that whether the debt is bad or doubtful it must in the ...
Bacha F. Guzdar Vs. the Commissioner of Income-tax, Bombay City
Court: Mumbai
Decided on: Mar-28-1952
Reported in: AIR1953Bom1; (1952)54BOMLR595; [1952]22CompCas198(Bom); ILR1953Bom525; [1952]22ITR158(Bom)
Chagla, C.J.[1] A very important question arises on this reference as to the liability of an assessee to pay tax on his dividend income when the dividend has been received from a company which derives its profits from agricultural activities and whose income or part of it is exempt from tax on the ground that it constitutes agricultural income.[2] The facts are very few. The assessee held shares in two tea companies, Patrakola Tea Co., Ltd., and the Bishnauth Tea Co., Ltd., and in the year of account she received dividends aggregating to RS. 2,780 on the shares that she held. These two tea companies carry on the business of growing and manufacturing tea. 40 percent, of the income of the tea companies was taxed as income from the manufacture and sale of tea, while 60 per cent, was exempt from tax as agricultural income. This was pursuant to RULE 24 of the Indian Income-tax Rules. The contention of the assessee before the Tribunal was and it is before us that 60 per cent, of this dividen...
Commissioner of Excess Profits Tax, Bombay North Vs. Karamchand Premch ...
Court: Mumbai
Decided on: Mar-28-1952
Reported in: AIR1953Bom32; (1952)54BOMLR607; ILR1953Bom110; [1952]22ITR79(Bom)
Chagla, C.J.[1] This reference has become necessary by reason of a somewhat extraordinary and extravagant claim made by the Department. We are concerned with the excess profits tax of the assessee and the chargeable, accounting period is '-1-1943, to 31-12-1943. It seems that in the chargeable accounting period Messrs. Sarabhai, Ltd., became a subsidiary company of the assessee company. Now, before 1-1-1913, i.e. prior to Sarabhai & Co., Ltd., became, if I may use that expression, merged with the assessee company, Sarabhai, Ltd., had a deficiency of profits in the sum of Rs. 1,83,422 for excess profits purpose. In the chargeable accounting period Sarabhai, Ltd., made profits and the contention of the assessue was that inasmuch as there was a deficiency of profits in the account of Sarabhai, Ltd., in a sum of Rs. 1,83,422 and inasmuch as Sarabhai, Ltd., had made profits during the chargeable accounting period, the deficiency of profits should be set off against the profits made by Sarab...
Firm of Narayandas Kedarnath Vs. Commissioner of Income-tax, Central
Court: Mumbai
Decided on: Mar-28-1952
Reported in: AIR1952Bom459; (1952)54BOMLR580
Chagla, C.J. [1] The question that arises on this reference is whether certain amounts standing to the credit of some of the partners of the assessee firm can be treated as the undisclosed profits of the firm itself. The facts giving rise to the reference are that a sum of Rs. 2,30,600 was brought in the assessment year 1940-41 by sis partners of the assessee firm, and a further sum of Rs. 40,647 was brought in by five partners in fact assessment year 1941-42. It has been found as a fact by the Tribunal that these amounts were actually brought in from Jaipur by means of drafts of the Imperial Bank of India, Jaipur. Therefore, we start with this position that these amounts do not represent fictitious entries but they represent actual cash received by the firm through some of its partners. Now, these partners were called upon to explain how these moneys were available to them in Jaipur and how they managed to get these moneys to the credit of the assessee firm; and we accept the Tribunal...
Mukundlal Bansilal Vs. Commissioner of Income-tax, Excess Profit-tax, ...
Court: Mumbai
Decided on: Mar-28-1952
Reported in: AIR1952Bom494
Chagla, C.J. [1] This reference raises a question as to the interpretation of Section 10(2)(xi). Income. tax Act. We entirely agree with the Tribunal when it takes the view that this particular clause has not been very happily drafted. If anything, the Tribunal has used very moderate language in considering the wording used by the Legislature. But, we have to construe it as we find it, and when we turn to that clause, it deals with a deduction under Section 10(2); and the deduction, in case of a person who is doing business, and whose accounts are not kept on cash basis, is'such sum, in respect of bad and doubtful debts .... as the Income-tax Officer may estimate to be irrecoverable but not exceeding the amount actually written off as irrecoverable in the books of tho assessee.'It is difficult to understand what distinction is sought to be made between bad and doubtful debts; but the difficulty and ambiguity is cleared by tho fact that whether tho debt is had or doubtful, it must in th...
Lalbhai Dalpatbhai Vs. Commissioner of Income-tax, Bombay North
Court: Mumbai
Decided on: Mar-27-1952
Reported in: [1952]22ITR13(Bom)
Chagla, C.J.1. A very interesting question arise on this reference as to the proper construction to be placed on the expression 'receivable' used in Section 8 of the Income-tax Act. The assessee is a Hindu undivided family and we are concerned with the assessment year 1945-46. The relevant account year was Samvat 2,000, the corresponding English dates being October 30, 1943, to October 17, 1944. One of the sources of income of the assessee was interest on 5% 1945-55 tax-free war loan of the case value of Rs. 14 lacs. Interest on these securities was payable on the April 15 and October 15 every year. These securities were lodged with the Imperial Bank of India. October 15, 1944, was a holiday, October 16 was working day and and 17 October 18, were again Diwali holidays. The Imperial Bank collected the interest in respect of these half year on the October 21, 1944. The Income-tax department treated these half-yearly income which was received by the Imperial Bank on the October 21, 1944, ...
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