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Documents citing Maharajadhiraja Sir Kameshwar Singh vs Commissioner Of Income-Tax, Bihar And ... on 25 October, 1960

Commissioner Of Income-Tax, Bombay ... vs Rajkumar Ashok Pal Singh on 14 August, 1975

In that behalf he invited our attention to the decision of the Patna High Court in Sir Kameshwar Singh v. Commissioner of Income-tax [1954] 26 ITR 121 (Pat). In that case the assessee had leased out Bankura forest by auction on short terms for lump sums and according to the terms of the lease, the lessee was entitled to cut down and remove all sal trees but not those which were more than three feet in girth above three feet from the ground and all other jungle trees other than fruit bearing trees and valuable timber trees; the lessee was further entitled to cut stumps not higher than five inches over ground so that new shoots may grow in rains and in time mature trees were produced. In other words, it was a case where a lease was given by the assessee for the purpose of selling timber in forest. It was conceded during the course of argument the sale proceeds would be income and hence taxable. The court took the view that there was no difference in the two positions; in the one, the assessee sold himself and in the other, for the sake of convenience, he leased out the forest for the purpose of sale by the lessee. The assessee had contended that the sale of forest trees should be treated as sale of capital asset, but that contention was negatived and after considering several earlier decisions, including the decision of the Privy Council, the Patna High Court took the view that the sale of the forest trees, which must necessarily result in exhaustion of the forest, for tax purposes, was income and was taxable.
Bombay High Court Cites 15 - Cited by 9 - V D Tulzapurkar - Full Document

Commissioner Of Income-Tax vs Gauri Shankar Agrawal on 7 July, 1980

13. The decision in Maharajadhiraja Sir Kameshwar Singh v. CIT [1961] 41 ITR 169 (SC) is not in point, for, in that case, the question was as to whether the remuneration received by a trustee from a trust whose property consisted, inter alia, of agricultural land was agricultural income. It was held that as the source of the right was the trust deed, the remuneration received was not agricultural income.
Allahabad High Court Cites 20 - Cited by 2 - Full Document

P.V. Mohamed Ghouse, Proprietor, Wahit ... vs The Commissioner Of Income-Tax on 20 August, 1962

10 The contrary view expressed by the Patha High Court in Maharajadhiraj Sir Kameshwar Singh v. Commissioner of Income-tax, Bihar and Orissa now be examined. The assessee had acquired certain shares in a company, which he treated as an investment. He made a contribution to the trustee for debenture-holders; in the company for the expenses of litigation against the U.P. Government, who revoked their undertaking to purchase the company, as a going concern and pressed for its winding-up. The assessee claimed that the contribution was for the purpose-of safeguarding his interest in the shares of the company. The Department and the Tribunal did not allow the expenditure on the ground that the Company had ceased to pay dividends. The assessee also claimed deduction under Section 12(2) of interest paid on overdrafts obtained for payment of income-tax (both Central and Agricultural), payment of land revenue and cess, and payment of call moneys on shares in companies which were found to be new and which had not declared dividends. The Patna High Court held that no deduction was permissible in respect of contribution to litigation expenses and of interest on overdrafts for payment off call moneys on shares in companies which were new and which had not declared dividends mainly on the ground that the expenses were not incurred for making or earning the income. There are no doubt observations in the judgment indicating that the absence of income is presumptive proof of the character of the expenses as not being incurred for the sole purpose of making or earning income. With respect we disagree.
Madras High Court Cites 18 - Cited by 17 - Full Document

The Acit,, Kottayam vs Kerala Forest Development Corporation ... on 8 May, 2019

11. We have considered the rival submissions on either side and also perused the material available on record. It is not in dispute that the trees were grown spontaneously in the property purchased in the year 2001. The question arises for consideration is - whether the sale consideration received on sale of the trees which were grown spontaneously without any human aid could be treated as a casual receipt or capital receipt? We have carefully gone through the judgment of the Apex Court in the case of Maharajadhiraj Sir Kameshwar Singh (supra) before the Apex Court. In that case various trees grown spontaneously without any human aid and labour were sold.
Income Tax Appellate Tribunal - Cochin Cites 24 - Cited by 0 - Full Document

P. vs Mohamed Ghouse V. Commissioner Of ... on 20 August, 1962

The contrary view expressed by the Patna High Court in Maharajadhiraj Sir Kameshwar Singh v. Commissioner of Income-tax may now be examined. The assessee had acquired certain shares in a company, which he treated as an investment. He made a contribution to the trustees for debentures in the company for the expenses of litigation against the U. P. Government, who revoked their undertaking to purchase the company, as a going concern and pressed for its winding up. The assessee claimed that the contribution was for the purpose of safeguarding his interest in the shares of the company. The department and the Tribunal did not allow the expenditure on the ground that the company had ceased to pay dividends. The assessee also claimed deduction under section 12(2) of interest paid on overdrafts obtained for payment of income-tax (both Central and agricultural), payment of land revenue and cess, and payment of call moneys on shares in companies which were found to be new and which had not declared dividends. The Patna High Court held that no deduction was permissible in respect of contribution to litigation expenses and of interest on overdrafts for payment of call moneys on shares in companies which were new and which had not declared dividends mainly on the ground that the expenses were not incurred for making or earning the income. There are no doubt observations in the judgment indicating that the absence of income is presumptive proof of the character of the expenses as not being incurred for the sole purpose of making or earning income. With respect, we disagree.
Madras High Court Cites 14 - Cited by 0 - Full Document

R.M. Veerabhadra Thevar vs Commissioner Of Income-Tax on 4 May, 1973

7. In the present case, according to the learned counsel for the assessee, there was a substantial identity between the vendor and the vendee-company and, therefore, there was no sale in the commercial sense and that the Tribunal and the authorities below overruled this contention holding that the seller was the assessee and the purchaser was a limited company, a different entity. There was a divergence of opinion on the question whether the transaction in such circumstances would amount to a sale, some decisions taking the view that the substance of the transaction will have to be taken into account in determining the character of the transaction, and the other line of decisions taking the view that the legal effect or the character of the transaction and not the substance of the transaction was relevant. The Supreme Court had set the matter at rest by approving the decision of the Patna High Court in Maharajadhiraj Sir Kameshwar Singh v. Commissioner of Income-tax. In that case the assessee who was carrying on publication of some newspaper floated a private, limited company for the purpose of carrying on his business and sold to the company the said business as a going concern for a sum of Rs. 12,50,000 which was received by the assessee in the shape of 12,500 fully paid up shares of Rs. 100 each. Of the 25,000 shares in the company all but the 50 shares were held by the assessee and the remaining 50 shares were held by his nominees. With respect to the assessability of the difference between the written down value and the amount for which the building, plant and machinery were transferred under the second proviso to Section 10(2)(vii) of the Act, it was contended on behalf of the assessee that, since he practically owned all the shares of the limited company, there was no material difference between the vendor and the vendee and the transaction was not in reality a sale. It was further submitted that regard must be had to the substance of the transaction and not to the form in which the transaction was effected. The Patna High Court held that the private limited company is in law a legal entity entirely distinct from its shareholders, that the assessee and the company were distinct legal entities and that the profit in question was rightly assessed to tax as income in the hands of the assessee under Section 10(2)(vii) of the Act.
Madras High Court Cites 14 - Cited by 2 - V Ramaswami - Full Document

Commissioner Of Income-Tax, Gujarat vs B.M. Kharwar on 22 September, 1965

The learned Advocate-General, however, drew our attention to a decision of the Patna High Court in Maharajadhiraj Sri Kameshwar Singh v. Commissioner of Income-tax where that High Court has taken a view contrary to the view taken by the Bombay, Calcutta and Kerala High Courts. The facts as correctly stated in the headnote of the report, were that the assessee was carrying on the business of publication of some newspaper. He floated a private limited company for the purpose of carrying on that business, and sold to the company said business as a going concern for the sum of Rs. 12,50,000 which was received by the assessee in the shape of Rs. 12,500 fully paid up shares of Rs. 100 each of the company. Out of the Rs. 25,000 shares in the company all but 50 share were held by the assessee and the remaining 50 were held by his nominees. The original cost of the building, plant and machinery which were transferred to the company was Rs. 2,79,822 and their written down value at the time of the transfer was Rs. 1,49,037. The taxing authorities treated the excess, namely, Rs. 1,30,785, as profits under the second proviso to section 10(2)(vii) and assessed this amount to income tax. The assessee contended that for tax purposes it was the duty of the authorities and the court to "lift the veil of corporate entity" and pay regard to the economic realities behind the transaction and, since, there was really no sale to a different party but only a different method of carruing on the same business and that the excess of Rs. 1,30,785 could not be assessed under the second proviso to section 10(2)(vii). The Patna High Court, after reviewing a number of English decisions, dissented from the Bombay decision in Sir Homi Mehta's Executors' case and held that a person veiled by the mask of corporate personality could not be allowed to pierce the veil himself for his own benefit. Though the assessee was the owner of all the shares in the company, he could not claim to be treated as if he were identical with the company in order to promote his own benefit or advantage. The High Court also held that the assessee and the company were distinct legal entities and that the sum in question was rightly assessed to income-tax.
Gujarat High Court Cites 11 - Cited by 0 - J M Shelat - Full Document
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