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1 - 6 of 6 (0.20 seconds)Section 10A in Income Tax Rules, 1962 [Entire Act]
Section 4 in Income Tax Rules, 1962 [Entire Act]
The Commissioner Of Excess Profits Tax vs Mohonlal Maganlal on 9 October, 1952
In the present case the High Court dissented from the Bombay decision in Commissioner of Excess Profits Tax v. Moholal Maganlal without appreciating that the view expressed therein had been approved by this court in the case of Sohan Pathak & Sons, even though the latter case was cited before the High Court and is referred to in its judgment.
Commissioner Of Income-Tax, Bombay vs Ahmedbhai Umarbhai & Co., Bombay on 4 May, 1950
In Commissioner of Income-tax v. Ahmedbhai Umarbhai & Co. the assessee, a firm resident in British India (Bombay), carried on the business of manufacturing and selling groundnut oil. The firm owned three mills at Bombay and one at Raichur which was in Hyderabad State. In all these oil was manufactured. The oil that was manufactured at Raichur was sold partly there and partly in Bombay. The position of the assessee-firm was that in respect of such oil which was manufactured at Raichur it could not be assessed to tax under the Act. The taxing authorities rejected that contention and the Appellate Tribunal agreed with them. The High Court disagreed with the view of the Tribunal and upheld the assessee's contention. On appeal to this court the relevant provisions of the Act were examined including the third proviso to Section 5. It was held that the activity which the assessee-firm carried on at Raichur was a part of its business within the meaning of the third proviso to Section 5 and that the profits of a part of the business, namely, the manufacture of oil in the mill at Raichur, accrued or arose at Raichur and that such profits were not assessable to excess profits tax under the third proviso to Section 5. It is true that the provisions of Section 10A did not come up for consideration in that case and for that reason it may be distinguishable. But the importance of this decision is that the direct point for consideration was whether, on the facts of that case, the third proviso to Section 5 could be invoked by the assessee-firm and it was open to it to claim that the work of manufacture of oil carried on at Raichur should be treated as a separate business within the meaning of the proviso. The decision went in favour of the assessee on that point, it being held that the profits of the manufacturing part of the assessee's business had accrued and arose at Raichur and were thus covered by the proviso and could not be subjected to excess profits tax.
Sohan Pathak And Sons vs Commissioner Of Income-Tax, U.P on 23 September, 1953
In Sohan Pathak & Sons v. Commissioner of Income-tax, the assessee claimed, in the matter of assessment relating to the chargeable accounting period ending October 8, 1943, that there had been a partial partition among the members of the Hindu undivided family. The family as such had ceased to carry on the business after that date though they continued to remain joint in status. After the partial partition the adult members of the family had formed two partnerships admitting the minors to the benefits thereof and carried on the same business which was being carried on by the Hindu undivided family. The Excess Profits Tax Officer was of the opinion that the main purpose of the creation of two partnerships was to avoid or reduce the tax liability of the assessees to excess profits tax and he made adjustment under Section 10A by adding to the profits made by the family till the date of the partition the profits made by the two firms daring the chargeable accounting period. Having failed before the Appellate Assistant Commissioner and the Appellate Tribunal and on a reference to the High Court, the questions having been answered against the assessee, the matter was brought to this court. The conclusion of the High Court that the main purpose behind the partial partition and formation of the partnerships was the avoidance or reduction of the liability of the family business to excess profits tax was accepted by this court. It was held that, if a business had been discontinued and had earned no profit during the chargeable accounting period, no excess profits tax could be charged in respect of such business and that, under Section 4 read with Section 5, the business could not be regarded as one to which the Act applied. It was further laid down that Section 10A could have no application to such a business. The issue whether the Act applied or not to a particular business had to be determined solely with reference to Section 5 and Section 10A must be construed as applicable only to cases where, the business being found to be one to which the Act applied, a transaction of the kind referred to in the section had been effected. The following observations at pages 401 and 402 may be reproduced with advantage, [1953] 24 I.T.R. 395 :
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