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1 - 6 of 6 (0.68 seconds)The Associated Cement Companies ... vs Its Workmen & Another on 5 May, 1959
As was pointed out in the
Associated Cement Companies case (1), all the
rehabilitation amount which may have been allowed to the
employer for rehabilitation in previous years but remained
unused for rehabilitation in the meantime, has to be taken
into account in arriving at the amount required for
rehabilitation. The same result can be arrived at in other
way, provided there is no appreciable .rise in price, by
taking the rehabilitation amount once arrived at and adding
to it such amounts as may be due for rehabilitation for new
blocks and also such amounts as may not have been left in
the hands of
(1) [1959] S.C. R. 925.
The Tata Oil Mills Co. Ltd vs Its Workmen And Others on 5 May, 1959
of that case does not show that the result of the
revaluation was that increased value was taken into account
in the matter of consumption of raw materials etc. The
tribunal overlooked this fact when it proceeded to apply
the ratio in the Tata Oil Mills case (1), to the facts of
the present case. It has however been urged on behalf of the
respondent that there is a contra-entry in the profit-and-
loss account and that shows that the tribunal was right in
ignoring the effect of revaluation on the debit side, for
the same sum of money i.e. Rs. 38,81,618/- was entered on
the credit side and so there could be no mistake in arriving
at the correct gross profit for that year. We have not been
able to understand what the effect of this entry on the
credit side is in arriving at the gross profit for the
year; nor has the learned counsel for the respondent been
able to explain the position clearly to us. We are of
opinion that the matter requires looking into and evidence
may have to be taken to find out how exactly the real
profits have been affected by showing on the debit side as
consumption the valuation of raw materials etc. at the
revaluation cost. The matter will therefore have to be
investigated further. But it may be added that if the stocks
are revalued that is no reason for showing the revalued cost
on the debit side as consumption, for in reality, the
revalued price is not what the mills paid for the raw
materials etc., consumed and therefore to get a correct
picture of the actual profit made, it is only the original
cost price which will have to be taken into account for that
purpose, for that is what the mills actually paid for
acquiring the raw materials. Further on sale of paper, the
profit made must be on the original valuation of paper stock
and not on the revalued figure which was not the cost to the
mills of making the paper. Finally it will also have to be
considered what is the effect of the so-called contra-entry
on the credit side of the profit and-loss account for that
year. Expert evidence may be necessary to explain
(1) [1960] 1 S.C.R. 1,
the position properly and arrive at the correct profits for
that year and so there will have to be a remand for the
determination of this question by the tribunal, as it is not
possible for us on the materials available on the record to
arrive at a final conclusion ourselves.
The Sree Meenakshi Mills, Ltd vs Their Workmen(And Connected Appeals) on 5 November, 1957
The contention under this head is that the tribunal
while calculating income-tax has only taken into account the
notional normal depreciation and not the statutory
depreciation, as it should have done. This matter was
considered by this Court in Sree Meenakshi Mills Ltd. v.
Their Workmen and again in the Associated Cement Companies
case (2), and it was pointed out that in calculating income-
tax the tribunal should take into account the concessions
given by the Income-tax Act to the employers, for two more
depreciations are allowed under s. 10 (2) (vi) of the
income-tax Act. At p. 962 of the report in the Supreme
Court Reports,e word "not" has been printed by
mistake and what this Court then decided was that in
calculating the amount of tax payable, the tribunal should
take into account the concessions given by the Income-tax
Act, though in the report it is printed that the tribunal
should not take into account the concessions. This will
however be clear from the calculation of income-tax which is
made at p. 994. Chart V shows that the notional normal
depreciation in that case was Rs. 100.22 lacs. Note A below
that chart further shows that in arriving at the amount to
be deducted as income-tax, the statutory depreciation
amounting to Rs. 165.49 lacs was deducted from the gross
profits and it was on the balance that income-tax payable
was calculated. We may add that a correction slip was
issued later. In the present case the tribunal has
apparently calculated incometax after deducting the notional
normal depreciation and not the statutory depreciation. The
contention
Petlad Turkey Red Dye Works Ltd vs Dyes & Chemical Workers' Union,Petlad & ... on 3 February, 1960
Three contentions have been raised in this respect on
behalf of the appellants. It is now well settled that a
balance-sheet cannot be taken as proof of a claim of what
portion of reserves has actually been used as working
capital and that the utilization of a portion of the
reserves as working capital has to be proved by the employer
by evidence on affidavit or otherwise after giving
opportunity to the workmen to contest the correctness of
such evidence b cross-examination :(see Petlad Turkey Red
Dye Works Ltd. v. Dyes & Chemical Workers' Union (1). What
happened in the present case was that the accountant of the
respondent gave two alternative calculations for arriving at
the reserves used as working capital. Thus there were two
figures given by the respondent to show what reserves were
actually
(1) [1960] 2 S.C.R. 906.
Khandesh Spg. & Wvg. Mills Co. Ltd vs The Rashtriya Girni Kamgar ... on 2 January, 1960
The second error into which the tribunal fell was in the
matter of deducting the amount available from liquid
reserves other than those ear-marked for specific purposes.
What the tribunal did in this case was that it did not
properly take into account the liquid reserves available
and deduct them from the rehabilitation amount found due by
it. The tribunal seems to have held that whatever sum was
working capital could not be deducted from the gross
rehabilitation amount found by it and reliance in this
connection was placed on the judgment of this Court in
Khandesh Spg. & Wvg. Mills Co. Ltd. v. The Rashtriya Girni
Kamgar Sangh Jalgaon (1). In that case the employer claimed
that the balance-sheet disclosed that the entire reserves
had been used as working capital and consequently such
reserves should not be excluded from the claim towards
rehabilitation. It was however held that the employer had
failed to prove that reserves had in fact been used as
working capital and as such the amount was rightly deducted
by the industrial court from the amount fixed for
rehabilitation. In our opinion the ratio of that case has
been misunderstood. That case does not lay down that all
the amount on which interest is allowed as working capital
cannot be deducted from the gross rehabilitation amount
found by the tribunal to arrive at the net rehabilitation
amount. What that case decided was that before a particular
reserve could be said to be not available for rehabilitation
it must be established that it has been reasonably earmarked
for a binding purpose or the whole or a
(1) [1960] 2 S. C. R. 841.
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