THE LIQUIDATORS OF PURSA LIMITED versus COMMISSIONER OF INCOME-TAX, BIHAR.

Citation: [1954] 1 S.C.R. 768 · Decided: 09-02-1954 · Supreme Court of India · Bench: MEHR CHAND MAHAJAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

S.C.R. 
SUPREME COURT REPORTS 
767 
"Any law of the 
State enacted not more than 
eighteen months before the commencement of this 
Constitution may within three months from such com-
mencement be 
submitted 
to the President for his 
certification ; and thereupon, if the President by pub-
lic notification so certifies, ,it shall not be called in 
question in any court on the ground that it contra-
venes the provisions of clause (2) of this article or has 
contravened 
the provisions of sub-section (2) of section 
299 of the Government of India Act, 1935." 
It is not disputed that the Madras Act XXVI of 
1948 does fulfil all the requirements mentioned above. 
Consequently, it is not possible for us to allow the ap-
pellants 
to 
raise the contentions which the learned 
counsel on their behalf wants to raise. The result is 
that the appeals would stand dismissed, but in the 
circumstances of this case we shall make no order as 
to costs. 
Appeals dismissed. 
Agent for the appellants : S. Subramanian. 
Agent for the respondents : R. H. Dhebar. 
THE LIQUIDATORS OF PURSA LIMITED 
v. 
COMMISSIONER OF INCOME-TAX, 
BIHAR. 
[MEHR CHAND MAHAJAN C.J., s. R. DAS, GHULAM 
HASAN and JAGANNADHADAS JJ. J 
Income-tax 
Act (XI 
of 
1922) 
s. 10(2) (vii) 
proviso 2-
Any such machinery or. plant must have been used in the account-
J·ng 
year-Section 
66-Finding 
of fact-When appeal court can 
intervene. 
The fundamental 
idea 
underlying 
the 
words used in 
the 
definition 
of 
"business" in s. 2( 4) 
of the 
Income-tax 
Act 
is 
the continuous 
exercise 
of an activity 
and the same central idea 
is 
implicit 
in 
the 
w~r?s ."carried 
on by him" 
occurring in 
s. 10( 1) 
and 
those 
cr1ttcal 
\Vords are an 
essential 
constituent 
of that which is to be produce the taxable income, and therefore the 
1954 
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v. 
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1954 
p,......, 9· 
768 
SUPREME COURT REPORTS 
[1954] 
1954. 
The f,iguiJai...s 
of Pursa Limitld 
tax is payable only in respect of the profits or gains of the business 
which is carried on by the assessec. 
That under 
clause 
(vii) 
of s. 10(2) 
the machinery 
and 
plant must be such as were used at least for a part of the account-
v. 
Commissiom 
lncumHa'Jt~ 
Bihat. 
6/ 
ing year. 
As the machinery and plant of the sugar factory which 
were sold had not at all been 
used for 
the purpose of 
business 
during 
the 
accounting 
year, 
the 
second 
proviso 
to 
s. 
10 
(2) (vii) could 
have no application 
and the assessees were 
nut 
liable. 
Although the 
High Court will not disturb or go behind a 
finding of fact of the Tribunal, it is \vell settled that \Vhere it is 
competent for 
a 
Tribun~1l to 
tn::ike 
findings 
of fa~-r 
\Vhich :.ire 
excluded from revie\v, 
the appeal court has 
ahvays juris<lictioi. to 
intervene if it appears either that the 
1~ribunal has n1isunderstt.~od 
the statutory 
language because 
the 
proper construction of 
the 
statutory language is a 1natter 
of la\v 
or that 
the 
Tribunal has 
made a finding for which there is no evidence or \Vhich is incon-
sistent with the evidence and contradictory of it. 
Commissioner of lncomt·-tax Y. Sluufl FVallace and 
ConiptJny 
(L.R. 59 I.A. 206), and Conunissioncrs of l11la11d Revenue v. Fraser 
{24 Tax Cases 498) referred to. 
CIVIL 
APPELLATE 
JuR1smcTION : 
Civil 
Appeal 
No. 33 of 1953. 
Appeal by special 
leave from the 
Judgment and 
Order dated the 16th May, 1951, of the High Court of 
Judicature at Patna in Miscellaneous 
Judicial Case 
No. 126 of 1950, arising out of the Order dated the 
17th 
May, 
1949, 
of 
the 
Income-tax 
Appellate 
Tribunal, Calcutta Bench, Calcutta, in LT.A. No. 147 
of 1948-49. 
Sukumar Mitra (S. N. Mul(herjee, with him) 
for 
the appellant. 
C. K. Daphtary,. Solicitor-General for India (Porus 
A. Mehta, with him) for the respondent. 
1954. February 9. The Judgment of the Court was 
.delivered by 
DAs J.-This is an appeal by special leave from the 
judgment of the Patna High Court delivered on a 
reference 
made 
by 
the 
Income-tax 
Appellate 
Tribunal under section 66(1) of the Indian Income-
tax Act. 
The tribunal referred the ·following two questions 
for the opinion of the High Court : 
"
:S.C.R. 
SUPREME COURT REPORTS 
769 
1. On the 
facts 
and in the circumstances of this 
case 
is 
the surplus of Rs. 13,05,144 arising out of the 
sale of the plant and machinery of the sugar factory 
chargeable under section 10 (2) (vii) ? 
2. vVas the profit of Rs. 
15,882 

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