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Commissioner Of Income-Tax, Bombay ... vs Scindia Steam Navigation Co. Ltd. on 1 November, 1977
cites
Section 2 in Income Tax Rules, 1962 [Entire Act]
Navnitlal C. Javeri vs K. K. Sen, Appellate Assistant ... on 28 October, 1964
In this connection, Mr. Vyas, on behalf of the assessee, referred us to the observation in Navnitlal C. Jhaveri v. CIT [1971] 80 ITR 582 (Bom), at page 586, where it is observed as under:
Commissioner Of Income-Tax, Bombay ... vs Jamnadas Khimji Kothari on 4 October, 1972
20. On the other hand, it may be pointed out that in connection with s. 2 (6A) (e) it has been observed that the phrase" accumulated profits" for the purposes of that provision does not mean profits as disclosed by the company's balance-sheet: [see CIT v. Jamnadas Khimji Kothari [1973] 92 ITR 105 (Bom)]. We are inclined to observe that the entire tenor of the discussion to be found in the Tribunal's order, that accumulated profits on the date of liquidation would only refer to such amount or profits which the company has taken to its accounts, appears to us to be beside the point.
Section 10 in The Income Tax Act, 1961 [Entire Act]
Section 66 in Income Tax Rules, 1962 [Entire Act]
Commissioner Of Income-Tax vs Elphinstone Spinning And Weaving Mills ... on 19 July, 1974
4. The arguments made before the Tribunal have been repeated before us. But it appears to us that as far as this court is concerned, the matter is concluded by the decision of the Division Bench in CIT v. Elphinstone Spinning and Weaving Mills Co. Ltd. [1975] 100 ITR 139 (Bom). It was held in the said decision that a contribution to a political party is not an expenditure incurred solely and exclusively for earning profits within the meaning of s. 10 (2)(xv) and would not be an allowable deduction. It was further observed that the donation was not deductible unless there was some connection between the expenditure and earning of profits. In coming to this conclusion the Division Bench observed that in several decisions of the different High Courts in India a uniform view has been taken by all the High Courts which had occasion to decide the question. It is unnecessary to set out these decisions once again. We observe that before such a claim can be upheld it would be for the assessee to establish a definite connection and satisfy the revenue authorities that the expenditure was laid out for the purposes of the business, and what has been suggested to us does not indicate such nexus or connection as is requisite for the allowance under s. 10(2)(xv).
The Companies Act, 1956
India Cements Ltd., Madras vs Commissioner Of Income-Tax, Madras on 8 December, 1965
15. Mr. Joshi, on behalf of the Commissioner, drew our attention to the decision of the Supreme Court in India Cements Ltd. v. CIT [1966] 60 ITR 52, where a distinction was made between obtaining of capital by issue of shares and obtaining loan by debentures. It is important to remember in connection with the observations to be found in the above decision that they are in the context of considering the amount spent by the assessee towards stamp duty, registration fee, lawyer's fees, etc., in connection with the loan which the assessee in the case before the Supreme Court, had obtained from the Industrial Finance Corporation and which had been secured by a charge on its fixed assets. The transactions which we are considering are of a totally different nature and it appears to us to be improper to pick out stray observations from a decision and apply them in a totally different context to a different set of facts. The Tribunal has found that what was being done by the assessee-company could be regarded as operations in connection with its capital and that from the mere frequency of the transactions or the fact that it was repeated from year to year (as it had to be) it could not be held that it was part of the business profits of the assessee. We are in agreement with this conclusion. It is quite clear that the accrual of surplus cannot be regarded as equivalent to profits earned out of the business activity. Once that conclusion is reached, it is immaterial for us to consider whether the accrual of surplus by the assessee-company is of capital nature or asset. In this view of the matter we are in agreement with the conclusions of the Tribunal and the question would be required to be answered in favour of the assessee.
Bharat Line Ltd. vs Commissioner Of Income-Tax, Bombay ... on 18 October, 1972
8. It is in this context that the itinerary as set out earlier has to be understood. It is further to be noted that in the course of its voyage out from India the ship in question had earlier reached Hamburg on June 17, 1956, and discharged substantial cargo. It left Hamburg on June 20, went to Gydnia in Poland and discharged the remaining cargo. From Gydnia it returned to Hamburg, in ballast, without taking any cargo and after reaching Hamburg it was handed over to the purchasers. This would clearly suggest that up to Gydnia the ship was being used in the shipping business of the assessee-company and from and after the date on which it left Gydnia it was proceeding to Hamburg merely for the purpose of effecting delivery to the buyers as provided in the memorandum of agreement. Once the facts are appreciated in this manner, it will become clear that they are comparable to the facts which were before this court in Bharat Line's case [1973] 90 ITR 363, referred to above. If that is so, at least as far as this court is concerned, it will have to be held that the ship, S. S. Jalakirti, could not be said to have been used by the assessee for the purpose of its business at any time after July, 1956, so that the inclusion of the amount of Rs. 20,03,448 under s. 10(2)(vii) would not be justified.