Court : Supreme Court of India
Reported in : AIR1970SC1624; [1970]78ITR10(SC); (1970)2SCC189; [1971]1SCR465
A.N. Grover, J.1. This is an appeal by special leave against a judgment of the Madras High Court rendered in its advisory jurisdiction in a case stated under Section 66(1) of the Income-tax Act, 1922, hereinafter referred to as the 'Act'. The appellant was a nonresident individual. During the previous year ending April 12, 1956 relevant to the assessment year 1956-57, he was a partner of a registered resident firm which carried on money lending business in India and Malaya. The entire income of that firm for the assessment year in question accrued outside India. The appellant's share in the income of the firm came to Rs. 62,612/- the whole of which was foreign income. The appellant had also incurred a loss of Rs. 8,484/- in his own business at Madras. While assessing the appellant the Income-tax Officer set off the loss in the appellant's Madras business against the foreign income and assessed him at the maximum rate as the appellant had not filed a declaration in terms of the proviso ...
Tag this Judgment!Court : Supreme Court of India
Reported in : [1970]78ITR4(SC); (1970)2SCC202; [1971]1SCR468
A.N. Grover, J.1. This is an appeal by certificate from a judgment of the Bombay High Court in an Income-tax reference. The respondent Company which is the assessee carries on business of the manufacture and sale of yarn and cloth in Bangalore. In 1914 it started a Provident Fund for the benefit of the monthly rated employees and this fund was called 'The Staff Provident Fund'. Subsequently another fund was started known as the 'Workmen Provident Funds'. These funds were not recognised under the provisions of Chapter IXA of the Income-tax Act, 1922 (hereinafter called the Act). The employees and the assessee made contributions to the two funds from time to time. The Employees' Provident Funds Act (to be referred to as the Provident Funds Act) came into force on 31st October, 1952. The amounts standing to the credit of the two funds on that date so far as they are referable to the contributions by the Company stood as follows :(1) Staff Provident Fund : Company's contributions upto 31-1...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1970SC1734; [1970]77ITR518(SC); (1970)2SCC192; [1971]1SCR452
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 859 and 860 of 1966. Appeals from the judgment and order dated April 6, 1966 of the Punjab High Court in Income-tax Reference No. 42 of 1962. Jagadish Swarup, Solicitor-General and B. D. Sharma, for the appellant (in both the appeals). B.Sen, S. K. Dholakia, and Vineet Kumar, for the respondent (in both the appeals). 12Sup.Cl/70-15 The Judgment of K. S. HEGDE and A. N. GROVER, JJ. was delivered by GROVER, J.J. C. SHAH, J. gave a dissenting Opinion. Shah, J. The Kulu Valley Transport Co. ?(P) Ltd.hereinafter called 'the Company'--did not file returns of income in respect of the assessment year 1953-54 and 1954-55 within the period specified in the general notice under s. 22(1) of the Income-tax Act, 1922. In January 1956 the Company filed voluntary returns disclosing loss of income in the course of its business amounting to Rs. 151,520/- and Rs. 48,977 respectively for the two years in question. The Income-tax Officer refused to determin...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1970SC1559; [1971]82ITR613(SC); (1970)3SCC864
J.C. Shah, J.1. Explanation to Section 23A (i) of the Indian Income-tax Act, 1922 before it was amended by Finance Act 1955 (in so far as it is material for the purpose of these appeals) provided: A company shall be deemed to be a company in which toe public are substantially interested if the shares of the company...carrying not leas than 25 p.c. of the voting power had been allotted unconditionally by and are at the end of the previous year beneficially held by the public foot including a company to which the provision of this section applies), and if any such shares have in course of any previous year been the subject of dealings of any stock exchange in the tax-able territories or are in fact freely transferable by the holders to other members of the public.2. For a company to be deemed a company in which the public are substantially interested, two conditions must co-exist, (1) the shares of the company carrying not less than 25 p. c. of the voting power must have been allotted un...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1970SC1814; [1970]78ITR68(SC); (1970)3SCC337
J.C. Shah, J.1. The facts of this case bear an uncanny parallel with the facts which gave rise to Civil Appeal No. 2184 of 1966 = reported in : [1970]78ITR62(SC) , Madhowji Dharamshi Mfg. Co. Ltd. v. Commr. of Income-tax, Bombay. Shapurji Broacha Mills Ltd.-hereinafter called 'the assessee' -was another flourishing concern. Till October 7, 1946 the assessee was managed by the Provident Investment Company Ltd. The shares of the assessee were taken over by the Dalmia Investment Company Ltd. By agreement dated October 29, 1948, the assessee appointed the D. C. P. M. as their selling agents for a period of 10 years with effect from November 1, 1948. The assessee also appointed Bharat Union Agencies Ltd. as their managing agents for 20 years from July 1, 1950. The resolutions passed and the appointments made for the managing agents and selling agents are in terms identical with appointments made for the Madhowji Dharamshi Mfg. Company Ltd. The purchasers of the assessee in this case are als...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1970SC1641; (1970)2SCC177; [1971]1SCR442; [1970]26STC303(SC)
A.N. Grover, J.1. This is an appeal by special leave from a judgment of the Punjab High Court holding that medicinal or toilet preparations containing alcohol were exempt from the payment of tax under the East Punjab General Sales Tax Act, hereinafter called 'the Act'.2. The respondent is running a factory for manufacturing spirituous and medicinal preparations containing alcohol at Jind in the district of Sangrur. Before the coming into force of the Constitution of India on January 26, 1950 'medicinal or toilet preparations' fell within the definition of 'excisable articles' on which the excise duty was payable under Section 3(6) (c) of the Punjab Excise Act 1914. The Act came into force in 1948. Under its provisions tax was levied on the sale of goods with the exception of articles exempted under Section 6 of the Act. These articles were given in Schedule B wherein Entry 37 was in these terms:All goods on which duty is or may be levied under the Punjab Excise Act, 1914.After the enfo...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1970SC1811; [1970]78ITR62(SC); (1970)2SCC229
J.C. Shah, J. 1. Madhowji Dharamshi Mfg. Co. Ltd.-hereinafter called 'the assessee' - was carrying on the business of manufacturing and selling textiles. The assessee was a flourishing concern; the annual profits earned by the assessee before October 1946 ranged between Rs. 15 to 20 lakhs and it had very large reserves. Till October 7, 1946, the assessee was managed by the Provident Investment Co. Ltd. which owned a majority of the shares of the assessee. On October 7, 1946 the entire share capital of the assessee was purchased by Dalmia Investment Company Ltd. and the Provident Investment Co. Ltd. resigned their office as managing agents of the assessee. 2. Dalmia Cement and Paper Marketing Company Ltd. hereinafter called 'the D. C. P. M.' - were incorporated on October 21, 1937 with the object, inter alia, of carrying on the business of and to work as selling agents or managing agents of any person, firm or company. By an agreement dated October 29, 1948, the D. C. P. M. were appoint...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1970SC1782; [1970]76ITR696(SC); (1970)2SCC185; [1971]1SCR446
A.N. Grover, J.1. This is an appeal by special leave from a judgment of the Calcutta High Court answering the following question which was referred to it by the Tribunal in the negative and in favour of the assessee.Whether on the facts and in the circumstances of the case, the Income-tax authorities were justified in imposing a penalty on the assessee under Section 28(1)(c) of the Income-tax Act?The assessee during the assessment year 1947-48, the corresponding previous year being the financial year ending on March 31, 1947 was a partner in the firm of M/s. Haji Sk. Md. Hussain Md. Jan of Calcutta. The Income-tax Officer while making the assessment discovered an undisclosed bank account of the assessee with the Central Bank of India Ltd. Bettiah, Bihar. It was found that a cash deposit of Rs. 87,000 had been made by the assessee on November 21, 1946 in that Bank. He was asked to explain the source of the amount of deposit. According to his explanation all his relations got panicky dur...
Tag this Judgment!Court : Supreme Court of India
Reported in : (1970)2SCC180
J.C. SHAH, J.1. Sri Ganapathy Mills Co. Ltd. distributed dividend to its shareholders out of the business profits earned by it in the years ending December 31, 1953 and December 31, 1954. The Company however carried in its accounts a large balance of unabsorbed depreciation admissible under Section 10(2)(vi) and Section 10(2)(vi-a) of the Income Tax Act, and on that account it had no taxable income in the relevant Assessment Years 1954-55 and 1955-56.2. In assessing the income of the shareholders for Assessment Years 1955-56 and 1956-57 the Income Tax Officer rejected their claim for exemption from tax under Section 15-C(4) of the Income Tax Act, 1922, and brought the dividend income to tax. This order was confirmed by the Income Tax Appellate Tribunal.3. The Tribunal referred the following question to the High Court of Madras for opinion:“Whether on the facts and in the circumstances of the case, the assessees are entitled to the benefit of Section 15-C(4) in respect of the divi...
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR1970SC1667; [1970]77ITR354(SC); [1971]1SCR434
J.C. Shah, J.1. Sri Ganapathy Mills Co. Ltd. distributed dividend to its shareholders out of the business profits earned by it in the years ending December 31, 1953 and December 31, 1954. The Company however carried in its accounts a large balance of unabsorbed depreciation admissible under Section 10(2) (vi) and Section 10(2) (vi-a) of the Income-tax Act, and on that account it had no taxable income in the relevant assessment years 1954-55 and 1955-56.2. In assessing the income of the shareholders for the assessment years 1955-56 and 1956-57 the Income-tax Officer rejected their claim for exemption from tax under Section 15-C(4) of the Income-tax Act, 1922, and brought the dividend income to tax. This order was confirmed by the Income-tax Appellate Tribunal.3. The Tribunal referred the following question to the High Court of Madras for opinion :Whether on the facts and in the circumstances of the case, the assessees are entitled to the benefit of Section 15-C(4) in respect of the divi...
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