LexCOMMISSIONER OF INCOME-TAX, WEST BENGAL versus A. W. FIGG}ES & CO., AND OTHERS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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should have resulted from such a course of dealing in
1953
securities as by itself would amount to the carrying on
Sardar Indra
of a business o~ buying and selling securities. It would Singh and Sona
be enough if such sales were effected in the usual course
Ltd.
of carrying on the business or, in the words used by the
v.
Privy Council in Punjab Co-operative Bank Ltd. v. Commissioner of
Income-tax Commissioner, Lahore('), if the realisation
Income-tax,
West Bengal.
of securities is a normal step in carrying on the assessee's
business. Though that case arose out of the assessment
Patanjali
of a banking business, the test is one of general appli-
Sastri a. J.
cation in determining whether the surplus arising out
of such transactions is a capital receipt or a trading
profit.
The question is primarily one of fact and there
are numerous cases falling on either side of the line but
illustrating the same principle.
On the facts found in
regard to the nature and course of the company's busi-
ness, there can be no doubt that the present case falls
on the Revenue's side of the line.
Agreeing with the High Court that there was ample
material upon which the Appellate Tribunal could arrive
at the conclusion which they did, we dismiss the appeal
with costs.
Appeal dismissed.
Agent for the appellant: S. 0. Banerjee.
Agent for the respondent: G. H. Rajadhyaksha.
COMMISSIONER OF INCOME-TAX,
WEST BENGAL
v.
A. W. FIGG}ES & CO., AND OTHERS.
[MEHR CHAND MAHAJAN, S. R. DAs and BHAGWATIJJ.]
Income-tax Act (XI of 1922), s. 25(4)-Firm paying tax i11 1918
-Conversion to limited co1npany in 1947-Right to relief under
s. 25(4)-0hange in personnel of jinn in 1939 and 1947, effect of.
For purposes of assessment to income-tax, a firm is a different
entity distinct from its partners, and a mere change in the con-
stitution of the firm does not bring into existence a new assessable
unit or a distinct assessable entity.
(1) 67 LA. 464, 481,
1943
Sep. 24.
172
SUPREME COURT REPORTS
[1954]
1953
A firm consisting of three partners, A, B and C, carried on the
business of tea brokers and paid income-tax under the Income-tax
oOmmissioner of Act of 1918.
There were several changes in the personnel of the
lncorne-tax,
partners and in 1939 the firm consisted of C, D-a.nd E.
C retired
1Vest Bengal
and in 1945 a new partnership deed was written up between D, E
y.
and F and they carried on the business. In 1947 the partnership
A. W. FiggieM
was converted into a limited company.
The Income-tax authorities
and Oo.,
refused to give relief under s. 25(4) of the Income-tax Act as the
)--
and Others.
p!irtnerfi of the £rm in 1939 were diiferent from the partners of the
firm in 194 7:
Held, that in spite of the changes in the constitution of the
firm, the business of the firm as originally constituted continued
right from its inception to the time it was succeeded by the limited
company and the firm was the same unit all through; the recon-
stitution of the firm in 1945 did not make it a different unit, and
the firrn was therefore entitled to relief under s. 25(4) of the Act.
CIVIL
APPELLATE
JURISDICTION:
Civil
Appeal
No. 77 of 1952.
Appeal from the Judgment and Order dated the 9th
January, 1951, of the High Court of Judicature at
Calcutta (Harries C. J, and Banerjee J.) in its Special
Jurisdiction (Income-tax) in Income-tax R!lference
No. 70 of 1950.
G. K. Daphtary, Solicitor-General for India (Porus
A. Mehta, with him) for the appellant.
N. G. Chatterjee (B. Sen, with him) for the respond-
ents.
1953. September 24. · The Judgment of the Court
was delivered by
MAHAJAN J.-This is an appeal from a judgment of
the High Court of Judicature at Calcutta delivered in
a reference under section 66(1) of the Indian Income-
tax Act, where by the High Court answered the question
referred in the affirmative.
The assessee is a partnership concern. When in-
come-tax was paid under the Act of 1918, the partner-
ship concern consisted of three partners, Mathews,
Figgies and Notley. The name of the firm was
A. W. Figgies & Co., and its business was that of tea
brokers.
There were several changes in the constitu-
~ion of the firm resulting in a change in the shares of
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SUPREME COURT REPORTS
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the partners. In 1924, Mathews went out and his
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share was taken over by Figgies and Notley. In 1926 Commissioner of
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