The supposition that the deceased man was 'employed' within the meaning of that term as used in the Act would appear to involve that he, as one of the partners, must be looked upon as occupying the position of being one of his own employers. It seems to me that, when one comes to analyse an arrangement of this kind, namely, one by which a partner himself works, and receives sums, which are called wages, it really does not create the relation of employers and employed, but is, in truth, a mode of adjusting the amount that must be taken to have been contributed to the partnership assets by a partner who has made what is really a contribution in kind, and does not affect his relation to the other partners which is that of co-adventurer and not employee. Such a partner cannot put himself in the position of not being a partner when he is one, or of being a workman employed when that position would involve that he would be both 'employer and employee'
The fact that a man does not mean to hold an investment may be an item of evidence tending to show whether he is carrying on a trade or concern in the nature of trade in respect of his investments, but per se it leads to no conclusion whatever."
The error of the Income-tax Officer lay in his view that, before such a contractual relationship can validly come into existence, the 'natural family relationship must be brought to an end'. This erroneous view appears to have coloured his and the subsequent decisions of the income-tax authorities.
the facts of the present case these loans and outstandings were shown as outstandings to the assessee in its balance-sheet as doubtful asset in the year 1954. It is true it was treated as an asset but it was not at any time brought into the profit and loss account.
The result of the decision in Riche's case (Supra) may be epitomised by two extracts from the speeches in the House of Lords. Viscount Simon L.C. But I see no reason why, when the judge orders payment of interest from a past date on the amount of the main sum awarded (or on a part of it), this supplemental payment... should not be treated as interest attracting income tax.
The short question which arises in the petition apart from the merits is whether the order of penalty in law can be sustained, the penalty being for default of a particular demand notice which itself the Assistant Controller subsequently treated as cancelled. Mr. Gulati, the learned Standing counsel has relied strongly on a decision of the Calcutta High Court in the case of Protap Chandra Ganguly v. Commissioner of Income-tax [1930] 4 ITC 418, for the proposition that the second notice issued is a valid notice and is not illegal.
he Kerala High Court has considered the scope of the proviso and has agreed with the Bombay view. In Commissioner of Income-tax v. Krishna Varier([1962] 44 I.T.R. 828.), it was held that where a business or institution is itself held under trust for religious or charitable purposes, it is property held under trust within the meaning of section 4(3)(i) of the Act, and its income is exempt from taxation. Such income is not brought back within taxation by proviso (b) to section 4(3)(i), as proviso (b) applies only to income derived from a business carried on on behalf of a religious or charitable institution.
The principle contained in these observations is quite applicable to this case. In fact, this is an a fortiori case. It is not suggested in this case that cash had to be kept in the premises for carrying on the business. Be that as it may, it has not been established that the loss resulting from the theft has arisen out of the conduct of the business and is incidental to the trade.
this decision of the Supreme Court, we have only to consider whether, on the facts of the present case, the same falls within the ambit of the decisions given relating to the powers of the Appellate Assistant Commissioner. In the case before us it was sought to be urged by the learned Advocate-General on behalf of the Commissioner that the Income-tax Officer had in fact applied his mind to the question whether purchases had been made by the assessee in British India and has also come to a definite conclusion that the income that could be deemed to have accrued in British India should not be taken into account for the year in question but should be taken into account for the subsequent years.
the present case the payee could have had no right to expect the recurrence because there was no obligation whatsoever on the part of the payer to make the same. The payee would get it if it was paid and may perhaps hope for it, but he would have no right to expect that the payment will necessarily be made or that he will necessarily get it.
The donor was entitled to a considerable part of the firms assets. If he desired to make any gifts of cash, consistently with the surrounding circumstances, we believe that a valid gift could have been made if he transferred to the donee in so far as the subject matter of the gift was capable or, possession of that subject-matter.
the present case no evidence has been led to show that the value of the assets as shown in the balance-sheet is not the true value of the assets or that circumstances exist which require that adjustment should be made in the valuation as shown in the balance-sheet. On the facts and in the circumstances of the case, the value of the depreciable assets as shown in the balance-sheet of the company is not liable to be adjusted with reference to the written down value of such assets as per the income-tax records.
The claim of the income-tax authorities was founded on section 10(2A) of the Act. The assessee objected to the inclusion of the said amount in its income. According to the assessee, the liability did not cease though the remedy to recover the amount of wages by the labourers and workmen may have become barred.
The income-tax authorities, however, had allowed the assessee a capital loss of Rs 4 lakhs in respect of these three items, which was to the advantage of the assessee and the assessee, therefore, had no cause to complain against the figure of capital gains as computed by the Appellate Assistant Commissioner.
the revenue wanted to contend that the option was of the Income-tax Officer who was assessing the trust to decide whether he would assess the income in the hands of the trustees or directly in the hands of the beneficiary. The Income-tax Officer who had assessed Champavahoo directly was not the Income-tax Officer who was assessing the trust for the assessment year 1955-56, and, consequently, the assessment made by the Income-tax Officer of Champavahoo did not preclude the Income-tax Officer who was dealing with the assessment of the trustees to assess the entire income in the hands of the trustees.
The original assessment on the two assessees was completed on January 22, 1952. The two assessees held shares in two registered firms and the shares of the profits from these firms were taken to be certain amounts and were included in the total assessable income of the assessees. The assessments of the two firms were not completed by that date. The firms were assessed by order dated October 16, 1954, and then it was known that the aggregate shares of the income from the two firms in the case of each of the assessees were more.
The Legislature has thus provided that the type of loss which could be carried forward for a limited number of years under section 24(2) should first be set off before the amount of unabsorbed depreciation allowance of previous years is not set off under section 24(1). It is to carry out this intention that the Legislature has stated in proviso (b) to section 10(2)(vi) that the deeming provisions will apply "subject to the provisions of clause (b) of the proviso to sub-section (2) of section 24".
The difference between the language of section 10(2)(xv) and the expression "any expenditure...incurred solely for the purpose of earning such profits" has already been pointed out earlier in this judgment.
the resident is liable to be taxed on his total world income, while a non-resident is liable to be taxed only on the territorial income but at a rate dependent on the total world income. We are not concerned with the question whether tax can be imposed on the non-resident in the same manner as the resident on the total world income.
The expenses were incurred in preventing the transfer of the control, vested in V.V. Chitaley and others to the liquidator appointed by the court. The money was spent merely for the purpose of preventing a change in the effective management and control of the assessee company and as such it could not properly be regarded as being laid out for the purpose of the assessee's trade or business.