LexP. V. RAGHAVA REDDI AND ANOTHER versus COMMISSIONER OF INCOME-TAX
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
1962
,%1dlu,. Bea·iwllJ' ..
PriNJI L1d.
v.
U11Um o/ lntlia
K•pur .J.
J!u;;t
5!16 SUPREME COURT REPORTS [1002) SUPP.
which owna a. fleet of buses a.nd lorries and carriell
on the business of transport
In res1wot of !IBRl'R~·
ment year I !!60-61 it cla.imoo a. development rPbate
on all its plants and machiner.v including buPines.q.
The Income tax Officer diHallowed tho olnim of
rebate on transport vehicles under the proviso
above quoted and computed the tax payable with-
out such rebatfl.
ft was contonderl on behalf of
the petitioner that the proviso oft'cnrls Art. 14 in
that it discriminates betweon machinery which is
office appliance or road transport vehicl<'s and
other kind of machinery. It is difficult to accept
such a contention because there is nothing in the
Constitution which prevents the legislBture from
r:hoosing thp, object of taxation from
11mong~t
various classes of machinery for the purpose of
giving d<'vefopment rebate. Tho Constitution rloes
not prohibit any sueh cla.ssifica.tion which has l>l'en
ma.de in the present case.
The petition is wholly without merit and is
thcr1Jforc dismiHSed a.nd the rule is discharged. The
p••titioncr will pny tho costi! of the respondent.
P1iifi(Jn d1'.'IT11i ... 'll'd.
P. V. RAGHAVA REDDI AND AXOTHER
v.
('0lJUIS810XER OF INCOME-TAX
( ll. P. S1~HA, C .. J., ,J. L. KAPt:a, M. HrnAYA·1..-1.1 .. w,
J. C. S11.\11 nncl .r. R. Mn.>1101.KAH, J.T.)
Nou-n ... i1/1111" f"IH1i/"111.1f·. ro111111i"si()11
d1tf' /u-ff1-rr:1•1-1! l1.11
/11rliut,fl1m 11111l 7r-tirl dir1cl/.11 ur tl1rfJu~1/I oll1P.1'-" "' th·· 11011.-1·,,,.;_
,/1 111 r'''"J"""!I --1/ ~lrtlflf(jr!J fllj,..1i,l-/1t1·r1111r, ;J 1'tr."i1.'r,/ in t,1.1·•111/1'
,,.,.,-itJJry--/111/ian /11rf1111•--fo.r:A.ct, 1922 (ll 11/ JC122),,.,.. 4(1J(t,),
·I! f)(r), 43.
The- appellant i\ a firn1 '"°·hich \\'as
~oin~ hu~incss ~11
mica.
To negotiate for ordrrs and I•• hancllc lt-s
other affa~r"
th<- appell..ant engaged a company in Japan ,vliich 1~ adn111-
tcdly a "non .. rtllii<lcnt" c<1mpany.
By agTr.c1ncnt l)ClWcr.n tl1c
2S.C.R.
SUPREME COURT REPORTS
597
t\vo fir1ns, <luring the yrars of account the amount of con1mis-
sion payable to the Japanese company was received by the
appellant. But this amount could not be sent, due to the
exchange control restrictions, to the Japanese company.
The amount was kept under the instructions of the Japanese
company in a separate account to be held on its behalf to be
applied as instructed. Some of the amount was later paid to
the Japanese company either directly or
through others.
Treating the appellant as 'statutory agent' of the J apanesc
company the Income-tax authoriti.s assessed the appellant
on the amount received for the two account years.
The
appeal to the Commissioner failed. But on further appeal
the Tribunal ordered the cancellation of the assessment. The
Commissioner of Income-tax obtained a reference to the High
Court and the High Court answered the question "whether
the aforesaid sum of Rs. 26,255-0,0 and Rs. I 1,272-0-0 being
selling commission credited to the aforesaid non-resident com-
pany's account in t!ie books of the assessee are chargeable in
the hands of the assessee under s. 4(1) (a) for the assessment
years 1949-50 and 1950-51 ?"in favour of the Department.
The assessee thereupon filed an appeal before the Supreme
Court on a certificate granted by the High Court.
1'hc two main questio11s before the Supreme Court were
whether the appellant was a •statutory agent' for purposes of
s. 43 and whether the income was received by Japanese com-
pany in 'the taxable territory'.
Held, thai there was a business connection between the
assessee and the Japanese company sufficient in law for treat-
ing the assessee as an agent for purposes of s. 43 and the
appellant was rightly treated as a 'statutory agent•: Before
the money was entered into the account in the name of the
Japanese company and held on its behalf there might be a
relation of debtor and creditor between the-assessee and the
Japanese Company; but after the money was credited in the
books of account in the name of the Japanese company it
belonged to it because it was held for and on behalf of that
company and was at its disposal. Therefore the income was
received in the taxable territory within the meaning of
s. 4(1) (a) of the Indian Income Tax Act, 1922.
Held, further, that els. (a) and (c) of s. 4(1) can be read
disjunctively and that it Excerpt shown. Read the full judgment & AI analysis in Lexace.