LexTHE COMMISSIONER OF INCOME-TAX, MADRAS versus K.T.M.T.M ABDUL KAYOOM
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
'-
lf/'51
-----------·--
-51s
SUPREl\IB COURT REPORTS [l!JG2] SUPP.
THE CO:.\HIISSIONER OF INCOi\IE-TAX, MADRAS
v.
IC T .. .ilI. T. l\I. ABDUL KAYOOi\I
(S. K: DAs, J. L. KAPUR and l\I. HrnAYATULLAII, JJ.)
, - -- · - Income
Tax~Capital Expenditure-Dealer in
conch
•hells-Lease money paicifor gatherin~ shells from sea-Nature
ojexpenditure-Income·tax Act, 1922(11 of l!J22), s.10 (2)(xy).
_The assessee firm canicd on the business in purchase and
sale of conch shells. It obtained a lease for 3 years for gathering
specified types of shells from the sea along the coastline abutting
on the South Arcot District.
It sought to deduct the amount
paid as lease money- from its profits from business on the
ground that this \vas an expenditure not of a capital nature
-but wholly and exclusively laid out for the purpose of business.
_ under s. 10(2)(xv) of_ the Income Tax Act.
-
. II.Zd, (per Kapur and Hidayatullah, JJ., Das, J. di'5ent•
ing) that the expenditure was capital expenditure and could
not be deducted from the profits. The business of the assessce
- was buying and selling shells but when it took the lease it
· went in for a new speculative business of fishing for shells.
The amount paid for reserving the vast coastline for future
fishing \Vas not price paid for obtaining the stock in trade i.e.
shells with which assessce did his business.
The" amount was
paid to obtain an enduring asset in the shape of an exclusive
_right to fish and the payment was not related to the shells.
Mohanlal
Hargovind v. Comrni8sioner - oj Income-tax,
G. P. & Berar, (194!1) 17 I. T. R. 473(P. C.), distinguished
Pringle lndustriea Ltd., Secunderabad v. Commi.s'Jionlr
of Income-tax, Hyderabad, [1960] 3 S. C.R. 681, applied.
Per Das J.-The expenditure \vas not capital expendi-
ture and was' deductible from the profits.
It was not an ex-
- penditure for the acquisition of property or of rights of a
. pexmanent character, the possession of \ovhich was n~cessary
' for carrying on of the asse.ssee's trade. By this lease the asses-
see acquired it.s stocks-in-trade rather than a source or endur-
ing_ asset_ for producing the stock-in-trade.
_
-
.llloha~lal I!argovind v.
Gommi•sioner of Income-tax,
G. P. & Berar (1949) 17 I. T. R. 473(P. C.), applied.
·
Pringle Industries Ltd., Secunrlerabad v. Commissioner
of Income-tax, Hyderabad, [1960] 3 S.C.R. 681, distinguished.
C1v:ll. APPELLATE JURISDIOTION: Review Peti·
tion No. 16 of 19130.
-
'
(1) S.C.R.
SUPREME COURT REPORTS
519
Petition for Review of this court's judgment
a.nd order dated April 26, 1960, in Civil Appeal
No. 64of1956.
A. V. Viswanatha Sastri, R. Ganapathy Iyer
and G. Gopalakrishnan, for the petitioners.
K. N. Rajagopala Sastri, and P. D. Menon, for
respondent.
1961. November 23.
Das, J., delivered his
own Judgment.
The Judgment of Kapur and
Hidayatullah, JJ. was delivered by Hidayatullah, J.
S. K. DAS, J.-I had taken a view different
from that of my learned brethren when this appeal
was heard along with Pringle Industries Ltd.,
Sec.underabad v. 1.'he Comrnissioner of lncome~t!lx,
Hyderabad (1), and that view was expressed in a very
short judgment dated April 26, 1960.
Now, we have had the advantage of hear-
ing a very full argument with regard to the facts
of this appeal, and I for myself have
had the
further advantage and privilege of reading the
judgment which my learned brother Hidayatullah,
J., is proposing to deliver in this appeal.
I have
very carefully considered the question again with
reference to the facts relating thereto and, much to
my regret, have come to the conclusion that I must
adhere to the opinion which I expressed earlier.
My view is that the facts of this case a.re indistin-
guishable from the facts on which the decision
of the Privy Council in
Mohanlal Horgovind v.
Commissioner of Income-tax, C. P. and Berar (')
was rendered, and on the principles laid down by
this Court in Assam Bengal Cement Go., Ltd. v.
The Commissioner of Income-tax, West Bengal ('),
it must be held that the expenditure of Rs. 6111/-
in this case was on reYenue account and the res-
pondent firm was entitled to the allowance which
it claimed.
(1) (1960] 3 S.C.R, 681.
() (1949) 17 I.T.R. 473 (P.C.),
(3)
(1956) 1 S.C,R. 972,
1961
Tht Commis.u'oner of
lncomtatox, M odras
••
K. T.M.T.1'1.
Abdul Kayoom
8.K. Das J,
1901
Tlie Commissioner of
lne~ltVC, Madras
v.
K.T.M.T.JI.
A•iul Kayaom
S. X. D11sJ,
52Excerpt shown. Read the full judgment & AI analysis in Lexace.