COMMISSIONER OF LNCOME TAX, MADHYA PRADESH, NAGPUR versus HUKAMCHAND MOHANLAL

Citation: [1972] 1 S.C.R. 786 · Decided: 17-09-1971 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

786 
COMMISSIONER OF lNCOME TAX, MADHYA PRADESH, 
NAGPUR 
v. 
HUKAMCHAND MOHANLAL 
September 17, 1971 
[K. S. HEGDE AND A. N. GROVER, JJ.J 
Jnco111e Tax Act, 1961, s. 41(1)- Assessee successor in business to 
her deceased husband--..A111ount received by assessee by way of remission 
of sales tax paid by h11sband-If liable to tax in the hands of the assessee 
under s. 41 (I). 
The assessee who \Vas successor-in-business to her deceased husband 
A 
B 
was sought"to be taxed under s. 41(1) of the Income-tax Act, 1961, in 
respect of certain amount received by her by way of remission from the 
C 
sales tax recovered from her husband. 
On the question whether the 
amount was assessable under s. 41(1) of the Act. 
HELD : Section 41 (I) does not apply, because, the assessee who is 
sought to be taxed is not the assessee contemplated by the section. ,.( the 
husband of the assessee had been alive and had received the amount which 
had been remitted during his life time he would certainly have been liable 
to pay tax under the provisions of s. 41 (I). But the husband having died 
D 
the Revenue could not take any advantage of its provisions. The Act does 
not contain any provision making a successor-in-business or the legal repre~ 
sentative of an assessec to whom an allowance has already been granted 
liable to tax under s. 41 (1) in respect of the amount remitted and received 
by the successor or the legal representative. [788 C-D, 789 A-Bl 
C.l. T .. Bombay City v. Amarchand N. Slirofl, 40 l.T.R. 59 and C./. T. 
Bombay v. James Anderson, 51 I.T.R. 345, referred to. 
E 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2421 of 
1968. 
Appeai'from the judgment and order dated January 31, 1967 
of the Madhya Pradesh High Court in Misc. Civil Case No. 88 of 
1966. 
F 
R. N. Sachthey and B. D. Sharma, for the appella,nt. 
Rameshwar Nath and Swaranjit Sondhi, for the respondent. 
The Judgment of the Court was delivered by 
Grover, J. This is an appeal by certificate from a judgment of 
the Madhya Pradesh High Court in an Income tax Reference. The 
Reference related to the assessment made on the assessee for the 
year 1962-63 for which the accounting period was the year ending 
March 3 l, 1962. 
The assessee carried on business as sole sell-
ing agent · of M/s. Mohanlal Hargovindas, 
Jabalpur. 
The 
assessee succeeded to this business on the death of her husband on 
or about February 17, 1960. 
It would appear that M/s. Mohan-
lal Hargovindas had recovered a certain amount towards sales-tax 
from the assessee's husband relating to the period January 26. 
G 
H 
A 
B 
c 
D 
E 
F 
G 
C.I.T. v. HUKAMCJ.iAND (Grover, J.) 
787 
1950 to March 31, 1951. 
In an appeal filed oy the said firm, 
however, the Assistant Commissioner of Sales Tax remitted the 
sum of Rs. 24,341/- so recovered by the firm by an order dated 
November 31, 1960. 
Consequently M/s. Mohanlal Hargovin-
das refunded that amount to the assessee by means of a draft dated 
October 31, 
1961. 
This draft was received by the assessee on 
November 9, 1961 which fell in the accounting period. 
The In-
come tax Officer sought to tax this amount under the provisions of 
s. 41 ( 1) of the Income tax Act 1961, hereinafter called the ~Act'. 
He did not accede to the contention of the assessee that the 
income, if at all, was the i;ncome of the assessee's deceased hus-
band and not her income. 
The Appellate Assistant Commissioner 
dismissed the appeal filed by the assessee. 
The Tribunal acceded 
to the contention of the assessee that since the allowance or de· 
duction in question had been obtained by a different assessee, 
namely, her husband she was not liable to pay tax on that amount 
under s. 41(1) of the Act. 
The Tribunal was moved by the Com-
missioner of Income tax for stating a case and referring the fol-
lowing question to the High Court : 
"Whether the sum of Rs. 24,341 was liable to tax 
under s. 41(1) of the Income tax Act, 1961 ?" 
The High Court answered the question in favour of the assessee. 
Section 41(1) is in t_he following terms:-
"41(1) Where an allowance or deduction has beerr 
made in the assessment for any year in respect of loss, 
expenditure or trading liability incurred by the assessee, 
and subsequently during any previous year the assessee 
has obtained, whether in cash or in any other manner 
whatsoever, any amount in respect of such loss or ex-
penditure or some benefit in respect of such trading lia-
bility by way of remission or cessation thereof, 

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