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Commissioner Of Income Tax, U.P.-Ii, ... vs Bazpur Co-Operative Sugar Factory ... on 6 May, 1988 cites

Dr. Indramani Pyarelal Gupta vs W. R. Nathu And Others on 11 April, 1962

In the light of the decisions discussed earlier, it appears to us that the respondent society had no authority in law to amend bye-law 50 with retrospective effect as it purported to do. We have already pointed out the power of the society to amend its bye-laws arises from the provisions of Rule 11 of the United Provinces Co-operative Societies Rules, 1936, which rule has been made under the powers conferred by Section 43 of the United Provinces Co-operative Societies Act, 1912. There is nothing expressly or impliedly in Rule 11 which confers any power on the society to amend its bye-laws with retrospective effect and in the absence of any such power being conferred, either expressly or by implication, it cannot be said that the society had any power to amend its bye-laws with retrospective effect. Mr. Manchanda, learned counsel for the respondent-society placed strong reliance on the decision of this Court in Dr. Indramani Pyarelal Gupta v. W.R. Nathu and Others, [1963] 1 S.C.R. p. 721 where it was held that the substituted bye-law 52AA of the East India Cotton Association made by the Central Government in exercise of the power conferred upon it under Section 12 of the Forward Contracts (Regulation) Act, 1952 and which, very shortly stated, conferred power on the Forward Markets Commission, after notifying with the Chairman of the Board of the East India Cotton Association, to close hedge contracts in the eventualities mentioned in the said rule was not invalid in law or ultra vires the Constitution. On a proper construction, the amended or substituted bye-law applied not only to contracts to be entered into futute but also to subsisting contracts. This Court pointed out that, in that case, the power to make bye- laws so as to affect the rights in subsisting contracts followed as a necessary implication from the terms of Section 11 of the Forward Contracts (Regulation) Act, 1952. In the case before us, however, there is nothing in Section 43 of the U.P. Co-operative Societies Act, 1912 or Rule 11 of the United Provinces Co-operative Societies Rules, 1936 to indicate that there is any power, express or by implied, in a co-operative society registered under that Act to make bye-laws with retrospective effect in respect of its business.
Supreme Court of India Cites 39 - Cited by 192 - N R Ayyangar - Full Document

M/S. Chowringhee Sales Bureau (P) Ltd vs C.I.T., West Bengal on 10 October, 1972

If the provisions of the unamended bye-law are to be applied, it 1043 is clear that these amounts which were deducted by the respondent from the price payable to its members on account of supply of sugarcane were deducted by the respondent from the price payable to its members on account of supply of sugarcane were deducted in the course of the trading operations of the respondent and these deductions were a part of its trading operations. The receipts by way of these deductions must, therefore, be regarded as revenue receipts and are liable to be included in the taxable income of the respondent. It is urged by Mr. Manchanda, that these receipts have been described in the bye-law 50 as deposits, but we fail to see how they can really be regarded as deposits. It was held by this Court in Chowringhee Sales Bureau P. Ltd. v. Commissioner of Income-tax, West Bengal, [1973] 87 I.T.R. p. 541 that it is the true nature and quality of the receipt and not the head under which it is entered in the account books as would prove decisive. If a receipt is a trading receipt, the fact that it is not so shown in the account books of the assessee would not prevent the assessing authority from treating it as a trading receipt.
Supreme Court of India Cites 12 - Cited by 319 - H R Khanna - Full Document

Punjab Distilling Industries Ltd vs The Commissioner Of Income-Tax, Simla on 24 November, 1958

The same principle can be derived from the decision of this Court in Punjab Distilling Industries Ltd. v. Commissioner of Income-tax, Simla, [1959] 35 I.T.R. p. 519. In that case, the assessee carried on business as a distiller of country liquor and sold the produce of its distiller to licensed wholesalers. Under a scheme devised by the Government, the distiller (assessee) was entitled to charge the wholesaler a price for the bottles in which the liquor was supplied, at rates fixed by the Government, which he was bound to repay when the bottles were returned. In addition to the price fixed under the Government scheme, the assessee took from the wholesalers certain further amounts, described as security deposits without the Government's sanction and entirely as a condition imposed by the assessee itself for the sale of its liquor. The moneys described as security deposits were also returned as and when the bottles were returned but in this case the entire sum taken in one transaction was refunded when 90 per cent of the bottles covered by it were returned. The price of the bottles received by the assessee was entered by it in its general trading account while the additional sum was entered in the general ledger under the heading "empty bottles return security deposit account." The question was whether the assessee could be assessed to tax on the balance of the amounts of these additional sums left after the refunds made out of the same. It was held that the additional amount described as security deposit by the assessee was really an extra price for the bottles and was a part of the consideration for the sale of liquor; it did not make any difference that the additional amount was entered in a separate ledger termed "empty bottles return deposit account". It was held that these additional 1044 amounts, which remained after the refunds were made, were trading receipts of the assessee and liable to tax. Applying these principles to the present case, in our opinion, it makes no difference that in the bye-law, these amounts have been referred to as deposits and the account in which these receipts were entered has been called "Loss Equalisation and Capital Redemption Reserve Fund". The essence of a deposit is that there must be a liability to return it to the party by whom or on whose behalf is made on the fulfillment of certain conditions. Under the amended bye-law, the amounts deducted from the price and credited to the said fund were first liable to be used in adjusting the losses of the respondent society in the working year; thereafter in the repayment of initial loan from the Industrial Finance Corporation of India and then for redeeming the Government share and only in the event of any balance being left, it was liable to be converted to share capital. The primary purpose for which the deposits were liable to be used were not to issue shares to the members from whose amounts the deductions were made but for the discharging liabilities of the respondent-society. In these circumstances, the receipts constituted by these deductions were really trading receipts of the assessee society and are liable to be included in its taxable income. In our view, the learned judges of the High Court were, with respect, in error in answering the question referred in the negative. In our opinion, the question referred must be answered in affirmative and in favour of the revenue.
Supreme Court of India Cites 4 - Cited by 18 - A K Sarkar - Full Document
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