Court : Supreme Court of India
Reported in : AIR1965SC325; [1964]53ITR225(SC); [1964]8SCR85
Subba Rao, J.1. The question for decision in this appeal is whether when the Income-taxOfficer in his discretion assessed an association of persons to income-tax, theAppellate Assistant Commissioner in appeal or the Income-tax Appellate Tribunalin further appeal can set aside that order and direct him to assess the membersof that association individually. 2. The facts lie in a small compass and they are as follows : The assesseeconsisted of several persons combined together for the purpose of purchasingcoal in order to supply the same to customers for domestic purposes and othersmall scale industries. For the assessment year 1948-49 the Income-tax Officerlevied tax upon the total income in the hands of the said association ofpersons. The assessee claimed that in the circumstances of the case it shouldnot be assessed to tax as an association of persons, but the proportion of theincome in the hands of each of the members of the association might be assessedto tax instead. As the Income-t...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1965SC171; [1964]53ITR231(SC); [1964]8SCR72
Shah, J.1. M/s Lal and Company hereinafter called the assessee carry on business inBombay as commission agents. In the course of assessment proceedings for theyear 1954-55 the assessee's books of account were examined by the Income-taxOfficer and it was noticed that the assessee had business connections withcertain non-resident parties. On March, 12, 1957, the Income-tax Officer issueda notice calling upon the assessee to show cause why in respect of theassessment year 1954-55 the assessee should not be treated under s. 43 of theIndian Income-tax Act, 1922, as an agent in respect of twenty-five non-residentparties named in the notice. The assessee denied that he had 'directdealings' with any non-resident party and that in any event the proposedaction was barred because the period prescribed for initiation of proceedinghad expired, and requested the Income-tax Officer to drop the proceeding. TheIncome-tax Officer B-III Ward, Bombay issued on March 27, 1957, a notice unders. 34 of the In...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1965SC321; [1964]53ITR186(SC); [1964]8SCR60
Sikri, J.1. The respondent, hereinafter referred to as the assessee, purchased an estate in 1950, known as Silver Cloud Estate, consisting of tea, coffee and rubber plantations, in Gudalur, Nilgiris, Madras State. Out of the sale price of Rs. 3,10,000, he borrowed Rs. 2,90,000, at interest varying from seven to eight per cent. per annum. For the assessment year 1955-56, the assessee claimed to deduct interest on this sum amounting to Rs. 22,628-9-8. The Agricultural Income-tax Officer, Gudalur, disallowed Rs. 21,057-15-1, allowing Rs. 1,570-10-7, under section 5(k) of the Madras Plantations Agricultural Income-tax Act (Madras Act V of 1955) (hereinafter referred to as the Act.) The relevant part of the assessment order is reproduced below : 'Interest on borrowing Rs. 21,057-15-1. The assessee has claimed Rs. 22,628-9-8 towards interest. It is seen that about Rs. 80,000 has been borrowed from various parties, for the maintenance of the estate. Under section 5(k) the interest has to be l...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1964SC1882; (1964)66BOMLR709; 1965MhLJ45; [1964]8SCR50
Hidayatullah, J.1. This appeal by special leave is directed against an order of the High Court of Bombay dated March 22, 1960 in its ordinary original civil jurisdiction. The facts are simple. By a letter dated July 30, 1955, Messrs. Kajaria Traders (India) Ltd., who is the respondent here and Messrs. Foreign Import and Export Association (sole proprietary firm owned by the appellant Jagdish C. Gupta) entered into a partnership to export between January and June 1956, 10,000 tons of manganese ore to Phillips Brothers (India) Ltd., New York. Each partner was to supply a certain quantity of manganese ore. We are not concerned with the terms of the agreement but with one of its clauses which provided : 'That in case of dispute the matter will be referred for arbitration in accordance with the Indian Arbitration Act.' 2. The company alleged that Jagdish Chander Gupta failed to carry out his part of the partnership agreement. After some correspondence, the company wrote to Jagdish Chander G...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1965SC59; [1964]53ITR176(SC); [1964]8SCR36
Subba Rao J. 1. These appeals by special leave raise the question of the construction ofthe provisions of s. 4(3)(i) of the Indian Income-tax Act, 1922, hereinaftercalled the Act, as amended by the Indian Income-tax (Amendment) Act, 1953,hereinafter called the Amending Act. 2. The facts are as follows. One P. S. Warriar, an eminent Ayurvedicphysician, carried on business in Ayurvedic drugs under the name and style of'Arya Vaidya Sala' and was also running a hospital named 'AryaSikitsa Sala' and a school called 'Arya Vaidya Pata Sala'. Thesaid Warriar died on January 30, 1944, after executing a will wherein hecreated a trust in respect of his properties, including the Arya Vaidya Sala.He gave directions to the trustees appointed under the said will to conduct thesaid business and to disburse the income therefrom in certain proportions tothe Arya Vaidya Sala, Arya Sikitsa Sala and Arya Vaidya Pata Sala and to hisdescendants. Broadly stated 60 per cent of the income was directed to be spe...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1964SC1813; [1964]53ITR204(SC); [1964]8SCR18
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 700 of 1963. Appeal by special leave from the judgment and order dated January 11, 1961 of the Madras High Court in Case Referred No. 131 of 1956. H. N. Sanyal, Solicitor-General, N. D. Karkhanis and R. N. Sachthei, for the appellant. K. Srinivasan and R. Gopalakrishnan, for the respondent. April 29, 1964. The judgment of SUBBA RAO AND SIKRI JJ. was delivered by SUBBA RAO J. SHAH J. delivered a dissenting opinion. SUBBA RAO, J.-This appeal by special leave is directed against the order of the High Court of Madras in a reference made to it by the Income-tax Appellate Tribunal under s. 66(2) of the Indian Income-tax Act, 1922, hereinafter called the Act. The facts that have given rise to the appeal may briefly be stated. There are 5 firms in Sivakasi manufacturing matches under the name and style of Shenbagam Match Works, Brilliant Match Works, Manoranjitha Match Works, Pioneer Match Works and Gnanam Match Works. The total number of the part...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1964SC1903; [1964(9)FLR124]; [1964]53ITR466(SC); [1964]7SCR892
Wanchoo, J. 1. These two appeals on certificates granted by the Madhya Pradesh High Court raise common questions of law and will be dealt with together. The respondent the Gwalior Rayon Silk Manufacturing (Weaving) Company Limited (hereinafter referred to as the company) is registered under the Indian Companies Act. It is necessary to set out how the company came to be established in order to understand the case put forward by the company. In October 1946 Messrs. Birla Brothers Limited, Gwalior, wrote to the Government of Gwalior that they intended to establish at some suitable place in Gwalior a kind of industrial center in which they intended to set up certain industries provided certain facilities were granted to them by the Government of Gwalior. The facilities for which they made the request were (i) free adequate land at suitable site; (ii) free processing water if obtainable from a river and at a specially concessional rate if obtainable from a dam; and (iii) exemption from any ...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1964SC1804; [1964]34CompCas676(SC); [1964]53ITR218(SC); [1964]8SCR9
Shah, J. 1. One Nageswara Rao Panthulu set up a business of manufacturing a'pain-balm' which was marketed in the trade-name of'Amrutanjan'. In September 1936 the respondent company was floated asa public limited company under the Indian Companies Act, 1913, to acquire andcarry on the business of manufacture and sale of 'Amrutanjan'. Theauthorised capital of the company was 7,000 ordinary shares and 3,000preference shares of Rs. 100/- each, and the issued and paid-up capital was2,500 ordinary and 3,000 preference shares. The preference shareholders were underthe Articles of Association entitled to a fixed dividend of 7 1/2 per cent onthe face value of the shares, with no right in the balance of the profits. Therespondent company took over the business conducted by Nageswara Rao Panthulufor Rs. 5,50,000/- paid in the form of 2,500 ordinary and 3,000 preferencefully paid-up shares. This company was managed by a firm which after the deathof Nageswara Rao Panthulu consisted of Ramayamma, wi...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1965SC6; [1964]53ITR195(SC); [1964]7SCR920
Shah, J.1. Rani Bhuwaneshwari Kuer - hereinafter referred to as 'the assessee' - was the proprietor of a seven - sixteenth share in an estate known as 'Tekari Raj', having inherited that estate from her parents. The assessee later acquired by purchase a major portion of the remaining nine-sixteenth share in the Raj. The estate held by the assessee was heavily encumbered, and with a view to arrange for liquidation of the debts the assessee executed an indenture of trust dated January 20, 1941, whereby the Tekari Raj and certain zamindari properties owned by the assessee were conveyed to certain named trustees to be held in trust, subject to conditions specified therein. The principal beneficiaries under the deed after payment of the debts were the assessee, her husband and her five sons. 2. By the 23rd clause of the deed it was directed that after making certain payments, the trustees shall divide the surplus of the net rents, issues and profits thereof in the proportions set out in the...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1964SC1676; (1964)0GLR98; (1964)GLR798(SC); [1964]8SCR1
Raghubar Dayal, J. 1. This appeal, by special leave, is directed against the order of theBombay High Court and raises the question of the true construction of sub-cls.(g) and (hh) of sub-s. (1) of s. 13 of the Bombay Rents, Hotel and LodgingHouse Rates Control Act, 1947 (Act LVII of 1947), hereinafter called the Act. 2. The facts leading to the appeal, in short, are that the appellant is atenant of the ground-floor of a house owned by the respondent. The respondentsued for the ejectment of the appellant on the ground that he required theentire house, including the portion occupied by the appellant, for hisresidential purpose. He further stated in the plaint : 'The whole suit bungalow isvery old - built about 75 years ago and at present its different parts arelikely to give way and collapse. Before sometime, a little portion of an upperbalcony had collapsed. In the circumstances, on finding it unsafe to stay in itwithout making additions, alternations and necessary changes, I, the plain...
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