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1 - 9 of 9 (0.28 seconds)Section 100 in The Income Tax Act, 1961 [Entire Act]
Commissioner Of Income-Tax, Excess ... vs Rama Sugar Mills Ltd., Bobbili on 27 May, 1951
In support of this proposition, Mr. Kaji first relied upon the decision of the High Court of Madras in Commissioner of Income-tax, Madras v. Sri Ram Sugar Mills Ltd. (1952) 21 I. T. R. 191 : (AIR 1952 Mad 689). The assesee company there was ...carrying on business of
manufacturing sugar and had in its factory three boilers. During the crushing season the factory
had to work for all the twenty-four hours and during such period, two of the boilers had to be constantly in use while "the third boiler had to be used when any one of the two boilers was either to be given rest or to be cleaned at intervals. One of the three boilers deteriorated in its efficiency in the relevant accounting period and the assessee replaced it by a new but an exactly similar boiler. The Appellate Tribunal held, that the expenditure incurred in the purchase, creation and fitting of the new boiler for replacing the old one was a business expenditure within the meaning of Section 10 (2) (xv) and thereupon a Reference was made to the High Court at the instance of the Commissioner. There was a difference of opinion between the two learned Judges who heard the Reference, but Mr. Kaji relied upon some of the observations made by Ratyanarayan Rao, J. who held that the expenditure in purchasing the new boiler was a revenue expenditure, deductible under Section 10 (2) (xv). The learned Judge was of the view that if the purchase of the boiler amounted merely to a replacement or a repair or putting in the original state the machinery,' by the use of which the process of manufacture was carried on, no additional advantage was thereby derived. He also held that it could not be suggested that by using a new boiler for an old one, the productive capacity of the sugar manufacturing unit was in any manner increased. On the other hand, the view held by Raghava Rao J. was that the new boiler had come in substitution for the old boiler which was part of the fixed capital of the company and therefore partook of the character of such capital. It might or might not be of superior quality or calibre than that of the old boiler, but it certainly had resulted in a substantial extension of the period of the serviceableness of the machinery and in the creation of an asset of lasting advantage or enduring benefit to the company in the nature of a fresh fixed capital asset, and therefore.
The Commissioner Of Income-Tax, West ... vs Royal Calcutta Turf Club on 28 November, 1960
Mr. Kaji also relied upon the cases reported in Dr. P. Vadamalayan v. Commissioner of Income-tax Madras 1960-40 ITR 501 : (AIR 1961 Mad 485), Commissioner of Income-tax, West Bengal v. Royal Calcutta Turf Club 1961-41 ITR 414 : (AIR 1961 SC 1028) and Seshasayee Brothers Ltd. v. Commissioner of Income Tax, Madras 1961-42 ITE 568 (Mad) which are practically decided on the same lines as the case in Ref. No. 14 of 1951 D/- 31-8-1951 (Bom) and therefore, it does not become necessary for us to consider them in any details. From these decisions, it was argued by Mr. Kaji that the expenditure incurred for the improvement in the standards of business would not amount to bringing into existence a capital asset. He pointed out that during this tour the director did not go alone to Europe but was accompanied by the superintendent of the mills, and that that fact indicated that the two of them had proceeded a study tour which ultimately might result in the purchase of new machinery by the assessee company, but that would not justify the conclusion that the tour was undertaken for the purpose of purchasing new machinery, that is to say for bringing into existence a new capital asset. The primary object, according to him, of the tour was to investigate whether the new processes should be introduced in the textile mills belonging to the assessee company, irrespective of the
fact that such processes might mean purchase of new machinery, and that the same would still be revenue expenditure. But Mr. Kaji's principal difficulty lies in the fact that this is not the conclusion arrived at by the Tribunal in respect of the tour undertaken by the director and the superintendent in the year 1955. The Tribunal has in clearest terms come to the conclusion that "the object of this tour was to replace the old and out-of-date or obsolete machinery used in the textile mills of the assesses company by the more modern ones. It is on record that after this visit, the assessee company did import this new improved and modern machinery in the years 1956 and 1957 for the purpose of being used in running its textile mills. In our opinion, the expenditure incurred in these circumstances relates to the fixed framework of the profit making apparatus of the assesses company and not to its carrying on of the business." The finding of the Tribunal as to the purpose and object of this tour is obviously a finding of fact which would be binding upon us as it is the Tribunal which is the fact finding body. But Mr. Kaji tried to assail this finding upon the ground that there was no evidence before the Tribunal to support that finding and that, therefore, though it was a finding of fact it had no sanctity and we are entitled to go behind that finding and coma to our own finding from the record of the case. Mr. Kaji contended that although a separate question has not been referred to us, namely whether there was any evidence to justify this finding of fact arrived at by the Tribunal or whether the finding of fact arrived at by the Tribunal was perverse and unreasonable, it being a finding on an intermediate fact, it was competent for us to disturb or interfere with such a finding without the necessity of a separate question being referred to us if we were to come to the conclusion that the finding of fact given by the Tribunal was not founded upon any evidence or that it was otherwise perverse or unreasonable.
Section 19 in The Limitation Act, 1963 [Entire Act]
New Shorrock Spinning And ... vs Commissioner Of Income-Tax, Bombay ... on 16 March, 1950
The basis of this decision, therefore, is the one laid down by Lord Chancellor Cave in the decision which we have already cited and which test was reiterated by Chagla C. J. in the Bombay decision. In our view, the three decisions cited by Mr. Kaji do not assist the assessee company, first, because one of them was a case
of replacement of a new but similar boiler for the old, which, according to Satyanarayana Rao J. did not bring about a larger activity or any benefit of an enduring nature to the trade, and the second was a case of current repairs where machinery was not even replaced but only parts of
some of them were changed. The decision of the Allahabad High Court did not lay down any principle different from the one indicated by Lord Chancellor Cave and Chagla C. J. in their respective decisions. None of these cases, therefore, can be regarded as an authority for the proposition that installation of machinery for introducing new processing would not be an expenditure for bringing in a new capital asset. That being so, the very foundation of the contention of Mr. Kaji is lacking.
Bhikamchand Bagri, Calcutta vs Commissioner Of Income-Tax (Central), ... on 25 March, 1960
Mr. Kaji relied upon two decisions, one of the High Court of Calcutta and the other of the Supreme Court reported in Bhikamchand Bagri v. Commissioner of Income-tax (Central) Calcutta 1962-44 ITR 746 : (AIR 1960 Cal 681) and Liquidators of Fursa Ltd. v. Commissioner of Income-tax Bihar 1954-25 ITR 265 :. (AIR 1054 SC 253), and pointed out to us from these decisions that even without the question having been referred to in these cases, the Court had interfered with the finding of fact on the ground that the finding of fact given by the Tribunal had lost its sanctity for the reasons stated in those decisions.
Dr. Vadamalayan, Madurai vs Commissioner Of Income Tax, Madras on 15 September, 1960
Mr. Kaji also relied upon the cases reported in Dr. P. Vadamalayan v. Commissioner of Income-tax Madras 1960-40 ITR 501 : (AIR 1961 Mad 485), Commissioner of Income-tax, West Bengal v. Royal Calcutta Turf Club 1961-41 ITR 414 : (AIR 1961 SC 1028) and Seshasayee Brothers Ltd. v. Commissioner of Income Tax, Madras 1961-42 ITE 568 (Mad) which are practically decided on the same lines as the case in Ref. No. 14 of 1951 D/- 31-8-1951 (Bom) and therefore, it does not become necessary for us to consider them in any details. From these decisions, it was argued by Mr. Kaji that the expenditure incurred for the improvement in the standards of business would not amount to bringing into existence a capital asset. He pointed out that during this tour the director did not go alone to Europe but was accompanied by the superintendent of the mills, and that that fact indicated that the two of them had proceeded a study tour which ultimately might result in the purchase of new machinery by the assessee company, but that would not justify the conclusion that the tour was undertaken for the purpose of purchasing new machinery, that is to say for bringing into existence a new capital asset. The primary object, according to him, of the tour was to investigate whether the new processes should be introduced in the textile mills belonging to the assessee company, irrespective of the
fact that such processes might mean purchase of new machinery, and that the same would still be revenue expenditure. But Mr. Kaji's principal difficulty lies in the fact that this is not the conclusion arrived at by the Tribunal in respect of the tour undertaken by the director and the superintendent in the year 1955. The Tribunal has in clearest terms come to the conclusion that "the object of this tour was to replace the old and out-of-date or obsolete machinery used in the textile mills of the assesses company by the more modern ones. It is on record that after this visit, the assessee company did import this new improved and modern machinery in the years 1956 and 1957 for the purpose of being used in running its textile mills. In our opinion, the expenditure incurred in these circumstances relates to the fixed framework of the profit making apparatus of the assesses company and not to its carrying on of the business." The finding of the Tribunal as to the purpose and object of this tour is obviously a finding of fact which would be binding upon us as it is the Tribunal which is the fact finding body. But Mr. Kaji tried to assail this finding upon the ground that there was no evidence before the Tribunal to support that finding and that, therefore, though it was a finding of fact it had no sanctity and we are entitled to go behind that finding and coma to our own finding from the record of the case. Mr. Kaji contended that although a separate question has not been referred to us, namely whether there was any evidence to justify this finding of fact arrived at by the Tribunal or whether the finding of fact arrived at by the Tribunal was perverse and unreasonable, it being a finding on an intermediate fact, it was competent for us to disturb or interfere with such a finding without the necessity of a separate question being referred to us if we were to come to the conclusion that the finding of fact given by the Tribunal was not founded upon any evidence or that it was otherwise perverse or unreasonable.
Seshasayee Brothers Ltd. vs Commissioner Of Income-Tax, Madras. on 21 March, 1960
Mr. Kaji also relied upon the cases reported in Dr. P. Vadamalayan v. Commissioner of Income-tax Madras 1960-40 ITR 501 : (AIR 1961 Mad 485), Commissioner of Income-tax, West Bengal v. Royal Calcutta Turf Club 1961-41 ITR 414 : (AIR 1961 SC 1028) and Seshasayee Brothers Ltd. v. Commissioner of Income Tax, Madras 1961-42 ITE 568 (Mad) which are practically decided on the same lines as the case in Ref. No. 14 of 1951 D/- 31-8-1951 (Bom) and therefore, it does not become necessary for us to consider them in any details. From these decisions, it was argued by Mr. Kaji that the expenditure incurred for the improvement in the standards of business would not amount to bringing into existence a capital asset. He pointed out that during this tour the director did not go alone to Europe but was accompanied by the superintendent of the mills, and that that fact indicated that the two of them had proceeded a study tour which ultimately might result in the purchase of new machinery by the assessee company, but that would not justify the conclusion that the tour was undertaken for the purpose of purchasing new machinery, that is to say for bringing into existence a new capital asset. The primary object, according to him, of the tour was to investigate whether the new processes should be introduced in the textile mills belonging to the assessee company, irrespective of the
fact that such processes might mean purchase of new machinery, and that the same would still be revenue expenditure. But Mr. Kaji's principal difficulty lies in the fact that this is not the conclusion arrived at by the Tribunal in respect of the tour undertaken by the director and the superintendent in the year 1955. The Tribunal has in clearest terms come to the conclusion that "the object of this tour was to replace the old and out-of-date or obsolete machinery used in the textile mills of the assesses company by the more modern ones. It is on record that after this visit, the assessee company did import this new improved and modern machinery in the years 1956 and 1957 for the purpose of being used in running its textile mills. In our opinion, the expenditure incurred in these circumstances relates to the fixed framework of the profit making apparatus of the assesses company and not to its carrying on of the business." The finding of the Tribunal as to the purpose and object of this tour is obviously a finding of fact which would be binding upon us as it is the Tribunal which is the fact finding body. But Mr. Kaji tried to assail this finding upon the ground that there was no evidence before the Tribunal to support that finding and that, therefore, though it was a finding of fact it had no sanctity and we are entitled to go behind that finding and coma to our own finding from the record of the case. Mr. Kaji contended that although a separate question has not been referred to us, namely whether there was any evidence to justify this finding of fact arrived at by the Tribunal or whether the finding of fact arrived at by the Tribunal was perverse and unreasonable, it being a finding on an intermediate fact, it was competent for us to disturb or interfere with such a finding without the necessity of a separate question being referred to us if we were to come to the conclusion that the finding of fact given by the Tribunal was not founded upon any evidence or that it was otherwise perverse or unreasonable.
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