INDIA UNITED MILLS LTD versus COMMISSIONER OF EXCESS PROFITS TAX, BOMBAY.

Citation: [1955] 1 S.C.R. 810 · Decided: 28-10-1954 · Supreme Court of India · Bench: MEHR CHAND MAHAJAN · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

Z,avtrbhai 
.Amoid0,1 
.. 
Tht State of 
Bombay. 
V tnkatarama 
AJ'1a1 J. 
1954 
•October28. 
810 
SUPREME COURT REPORTS 
[1955] 
this Court which was presented 
under article 132(1), 
the only ground that was put forward as involving a 
substantial 
question as 
to the interpretation 
of the 
Constitution was, whether the 
Bombay Act No. XXXVI 
of 1947 was repugnant 
and 
void 
nnder article 254 of 
the 
Constitution. No other question having been raised 
in the petition, we must decline to permit the appellant 
to raise this point. 
In the resnlt, -the appeal fails and is dismissed. 
Appeal dismissed. 
INDIA UNITED MILLS LTD. 
v. 
COMMISSIONER 
OF EXCESS 
PROFITS 
TAX, BOMBAY. 
l_JvlEHR CHAND MAHAJAN C.J., S. R. DAs 
GHULAM HASAN, BHAGWATI and 
VENKATARAMA AYYAR JJ.] 
Excw P,.ofits Tax Act (XV of 1940), 
s.<. 15, 26(3)-Meaning 
and i111port of the tvord 'discovers'-Allotvance granted to assessec on 
his rcprese11tatio11-Sttbsequent 
facts shotv that representation 
as 
untrue, Effect of. 
The \Vord ·'discovers' in s. 15 of the Excess Profits Tax Act, 
1940, is not limited to facts discovered, which existed during the 
relevant chargeable accounting period for which assessment is re-
opened under the section 
but also includes facts so discovered 
which came into existence subsequent to such accounting period. 
Allo\vance \Vas granted to an assessee by the Central Board of 
Revenue under s. 26(3) of the 1\ct for the chargeable accounting 
period during the \var on the ground that certain buildings, plant 
and n1achinery provided for production of war materials will not 
be required for the purposes of assessee's business after the terrn.i.-
nation of the war. 
But it \Vas discovered that even after 
the 
termination of \Var the buildings, plant and machinery in question 
\Vere actually used by the assessee for his business. 
Held, that the Excess Profits Tax Officer had ample power to 
proceed against the assessee to reassess him under s. 15 of the Act. 
• 
Dodwarth v. Dale ([1936] 2 K.B. 503: 20 Tax Cases 285); 
·~ 
Anderton and Halstead Ltd. v. Birrell ([1932] 1 K.B. 271: 16 Tax 
Cases 200) ; Gray (H.M. Inspector of Taxes) v. Lord Penrhyn (21 
-
a 
S.C.R. 
SUPREME COURT REPORTS 
811 
Tax Cases 252); Williams v. Trustees of W. W. Grundy ((1934] 1 
K.B. 524, 533); Commercial Structures Ltd. v. Briggs ([1948] 2 All 
England Reports 
1041) and Inland Revenue 
Commissioners 
v. 
Pear.w11; Same v. Pratt ( (1?36] 2 K.B. 533), referred to. 
CrvrL 
APPELLATE 
JURISDICTION : 
Civil 
Appeal 
No. 160 of 1953. 
Appeal by 
Special Leave from the Judgment and 
Order 
dated the 1st day of April, 1952, of the 
High 
Court of Judicature at 
Bombay in 
Income-tax Refe-
re!1ce No. 49 ot 1951. 
R. /. Kolah and Raiinder Narain for the appellant. 
M. C. Setalvad, Attorney-General for India. ( G. N. 
Joshi and P. G. Gokhale, with him) for the respondent. 
1954. October 28. The Judgment of the Court was 
delivered by 
VENKATARAMA AYYAR J.-This is an 
appeal 
from 
the judgment of the 
High 
Court of 
Bombay on a 
reference under section 66(1) of the Indian 
Income-tax 
Act, and the 
question 
for determination is as to the 
validity of certain re-assessments 
made 
under 
section 
15 of the Excess Profis Tax Act, which will hereafter 
be referred to as the Act. 
In proceedings for assessment 
of excess profits for 
the year 1941, the 
appellant 
Company 
applied 
for 
relief under section 26(3) of the 
Act, which so far as is 
material 
for the 
purpose of this 
appeal, runs 
as 
follows: 
"If on an application 
made 
to it through 
the 
Excess Profits Tax Officer the Central Board of Revenue 
is satisfied that the computation in accordance with the 
'1' .., 
provisions 
of 
Schedule I of the profits of a business 
during any 
chargeable 
accounting 
period 
would be 
inequitable, owing to any 
of the 
following 
circum-
stances, namely-
* 
* 
* 
(b) the provisions of buildings, plant or machinery 
which will 
not 
be required 
for the purposes of the 
business after the termination of the present hostilities; 
* 
* 
* 
~·~ 
The Central Board of Revenue may direct that such 
allowances shall be made in computing the profits of 
1954 
India Unitd 
Mills Ltd. 
v. 
Commissioner of 
Excess Profits 
Tax, Bombay. 
1954 
India United 
Mills Ltd. 
·,. 
Commissioner of 
Excess Profits 
Tax, Bombay. 
Venkatarama 
A..var ]. 
812 
SUPREME COURT REPORTS 
[1955] 
the business <luring 
that chargeable accounting period 
as the Central Board of Revenue t

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