LexINDORE MALWA UNITED MILLS LTD versus THE COMMISSIONER OF INCOME-TAX(CENTRAL) BOMBAY
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JY62.
M /s~ SooraJmull
.Nagai mull
v.
. Commi.s.fiontr pf
lncome-ta.t, Calcutt..i
Shah J.
1962
FebruaT)' 191 '
'
SlO SUPREME COURT REPORTS (1962] SUPP.
,,
.
the Oovrt or Tribunal is founded.
The Legi.slature
has expressly entrusted th~ powei:- of appraisal of
f!Vidence to the T.axing authorities, and the decision
of those authorities would orqinarily be regarded
as final.
This is not to say that in a proper case
this Court m;i.y not, in the interest of justice. when
occasion demands it, review the evidence. "Tli:e"
power of this Court unde~ Art. 136 is not restricted;
but it is only in very exceptional cases that this
Court enters upon appraisal of evidence in appeals
filed with special leave and this case does not dis-
close any such exceptional circumstances.
'
On this ground the appeals Nos. 238 and 239
of 1961 filed by the assessees and the Commissioner
against the order of the Tribunal must fail and are
dismissed with costs. One hearing fee.
Appeals dismissed.
INDORE MALWA UNITED MILLS LTD.
v.
THE COMMISSIONER OF INCOME-TAX
(CEN'J."'RAL) BOMBAY
,
...
(S. K. DAS, M. HIDAYATULLAH and J.C. SHAH, JJ.)
1
Income Tax-Propeedings under s. 24 of the Indian
Income-ta:& Act,-Scope and effect of section and its proviso-
Set-off of loss-Indian Income-ta:& Act, 1922 (11 of 1922). as
24(1), (2), 14(2) (c), 4(1) (a); (c)l . '
The assessce company carried on a business of manufac-
ture and sale of textile goods. The manufacture was·111ade ac
its mills in Indore which was an Indian State before integra•
tion and had its own law as to income-tax known as the Indore
Industrial 'rax R,;les, 1927.
The sales of textile goods so
manufacttlred wer~ made 'at various places, some inside and
some outside the taxable territories of the then British India.
For and tipfo assessment' year 1949-50 the assessee company
was treated as a pon-resident.
Indore became a part of
the taxable territories within the meaning of the Indian
3 S.C.R.
SUPBE:ME_ COURT REPORTS
311
Tncome-tax Act, 1922 in the two assessment years 1950-51 and
1951-52 and the assessee company was held to be "resident
and ordinarily resi8.ent" wi,thin the meaning of that Act.
Upto the asseisment ,year 1949-50 that part of its profits
which was received by the'assessee company in British India
was s_ubjected to tax together with its other income which
accrued in British India. In making the calculation of busi-.
nesS' profits or loss received or arising in the taxable territories,
a proportion Was struck betWeen the total turnover and its sales
the proceeds whereof were receivfd in the taxable territories.
The assessee company raised· two questions in the_ course of
the assessment proceedings, one of which with regard. to the
entile loss of Rs. 5119,590/- of the year 1948-49
whi~h it
' claimed to set-off against the profits made. in its "busine~s in
the two assessment years.
The a'Ssessee company contCnded
that ihe business was one arid under s. 2-4- it \Vas entitled to
set off the losses which it hlid sustained in- 1948-49;-
:fhe
High i:;ourt decided this question against the assessee compai;iy,
but gave a certif[cate under s. 66A of the .Act.
Held, on app~~J, that the High Gourt,correctly answered·
the question. The pro'Oisions of s. 24 of the Act read with tlie
provisions ins. 4(1) (a) and (c) and s. 14(2)(c) make it clear
that sub-s(l) of s. 24 when it talks of profits or gains has
reference to. iaxab]e profits or tB.xablc gains ; it has no reference
to incorrie accruing or arising withollt t}J.e taxable t.,crritories
which were not liable to be assessed in the case of non-residents.
In determining the natllre of the loss.cs under consi'deration in
these appeals the_ relevant year was 1948-49, the year irt wh\ch
the Ios~es occurred, and·th' High (four! rightly took the View
that for the app!ip>tion of sub-s (2) of s. 24, the losses must be
~uch losses as cpuld have been set-off under ,:;ub-s.( I) o~ s. 24.
Nos.
CIVIL APPELLATE J~ISDICT~oi{: Civil Appeals
149 and 150 of 1961.
.
-
,
Appeals from· the judgment and order dated
September 23, 195~, of the Bdmbay High Court in
I.T.R. No. 86 of the 1957.
"
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R. J. Kolah, J. B. Da_dachanji, 0. 0. Math'Ur and
Ravinder Narain, for lhe appellants.
•
'
J
K. N. Rajagopala Sastri and D. Gupta, for the
respondent.
·
1961
lndp1t II a/wa Tlnited
Mills Ltd
v.
The Commissioner of
Incum1-tax (Oentral)
. Bombay
1~6t
/ndurt .~!alu:a L·n:·rExcerpt shown. Read the full judgment & AI analysis in Lexace.