KARAM CHAND THAPAR Ii: BROS. (P) L1D.

COMMISSIONER OF INCOME-TAX, (CENTRAL)·

CALCUTTA

February 20, 1969

[J. c. SHAH, v .. RAMA.SWAMI AND A. N. GROVl!R, JJ.)

Income Tax-Single transaction of salt resulting in profit-.,, lun such profit should be deemed to be revenue liable to tax-lncomt-tax A.•t

(11 of 1922), •. 24(1) and (2)-Sale in one accounting year t:nd ••1111 ment of price in the succeeding year-Sale resulting in cessation al b&. ness and in loss-Assessment proceedings for th• latter Y•-lf Ion .., C allowable deduction under s. 24(1).

The assessee-company was carzying on the business of coal minin1 uol of a Dry Ice Factory, in addition to various other kinds of busineas, Jt obtained a prospecting licence, and after prospecting for coal sold it wit•- in a short time of its acquisition and thereby earned profits in the accouating years 1948-49 and 1949-50. It sold the Ice Factory in 1948. Thoop the purchaser took possession of the ice factory in 1948, the price was )) finally settled in December 1949. By that sale the assesseo-compaay suffered a loss.

The assessee claimed : ( 1) that the profits were gains of a capital nature and hence not liable to tax; and (2) that the loss was deductiblo from its income in the assessment year 1950-51.

(I) The department, Tribunal and High Court held that the pr .. 11 E. from the sale of colliery were in the nature of rev011ue and were liable '° tax under the Income Tax Act, in the two corresponding asses.went yean, namely, 1949-50 and 1950-51; and

(2) It was held that Joss in the ice factory transaction was suJrerl<I in the accounting year 1948-49 and assessee's claim could be sustainlll only under s. 24( 2), elf the Income tax Ac~ 1922, but that the .... section was not applicable, because, the business ceased completely bclon y the commencement of the following accounting year 1949-50 (usesalllHt year 1950-51).

In appeal to this Court, HELD : { 1 ) Where a person disposes of a part or the whole of llis assets the general rule is that the mere c; hange or realization of an iutMtment d0es not attract liability to income tax, but, where such a realiaatiOll. is an act which in itself is a trading transaction, profit earned by sale or G conversion is taxable. In determining whether the gain is realization of a mere enahancement of value (capital gain) or is a gain made in H. operation of business in carrying out a scheme for pofit"!"akin.g (revenue) no uniform rule can be evolved. Though a transaction IS an 1Solated ODO, it may be intimately related to the normal business of the tax-payer. h such a case, the profit arising from the transaction will be out of the tax payer's business and will be assessable as business profits. (799 C-D, P;

800 B..CJ H Prospecting of coal was a part of the mining .busintJS which , tile assessee was carrying on. Therefore, the transaction of p~ developing and selling the colliery was one in )he nature of ~.

A Hence, the profit arising from the oale, thoogh it was an isolated transaction, was in the nature of revenue and liable to tax. [801 F-H]

Janki Ram Bah4dur Ram v. Commi&rioner of lncom•-tax, 57 l.T.ll. 21, 2S(S.C.), followed.

Commissioner of Tax'S v. M•lbour,.. Trust Ltd. [1914] A.C. 1001, 1010 (P.C.), Califorrncn Copper Syndicat• (Limited and R•duc•d) v.

Harris (Surv•yor of Tax.s) S T.C. 159, 166, Imperial Tobacco Co. v.

Kelly, 25 T; C. 292, Beynon & Co. Ltd. v. Ogg (Surveyor of Tax'1) 7 T.C. 125 and Glouc.si.r Railwa, v Carriag• and Wagon Co. Ltd. v. Commi.uioners of Inland Rev.nu•. 12 T.C. 720, referred to.

(2) By s. 24(1) the loss or profits or gains suffered under any bead in any year was liable to be set off in that year against the income, prollta or gains under any other h•cd; but by s. 24(2) where the loss suffered ia

any business, profession or vocation could not be wholly set off under •uh-•. (I) the loss not so set off has to be carried forward to the following year and set off against the profits and gains of th• scm• bus;,..., ia the •ubsequent year. [802 F-G]

In the present case, loss was suffered in the accounting year 1949-50 when the pbce was settled and not in 1948-49 when the sale took place.

Therefore, under s. 24( 1) the loss was allowable against the busine51 in come ot the assessee for the adcounting year 1949-50, that is, in proceedinp for the assessment year 1950-51. [803 A-Bl CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1594 and 1595 of 1968.

Appeals from the judgment and order dated August 29, 1963 of the Calcutta High Court in Income Tax Reference No. 38 of 1960.

Sachin Chaudhuri, T. A. Ramachandran and D. N. Gupt11, for the appellant (in both the appeals).

D. Narsaraju, S. K. Aiyar, R. N. Sachthey and B. D. Shann• for the respondent (in both the appeals) .

The Judgment of the Court was delivered by

Shah, 1. In respect of assessment years 1949-50 and 1950-51 the Income-tax Appellate Tribunal referred five questions to the High Court of. Calcutta under s. 66 (I) of the Indian Incomtax Act, 1922. Three of those questions which are canvassed in these appeals need be set out :

Assessment year 1949-50 " ( I ) Whether on the facts and in the circumstances of the case, the sum of Rs. 51,550/- was a profit in the nafure of revenue and therefore liable to tax under the Indian Income-tax Act ?"

Assessment year 1950-51 " ( 3) Whether, on the facts and in the circumstances

of the case, the sum of Rs. 8,756/- was a profit

'798

SUPREME COURT REPORTS [1969] 3 SoC.R.

in the nature of revenue and was subject to tax A under the Indian Income-tax Act ? ( 4) Whether, on the facts and in the circumstances of the case, the loss of Rs. 34,891/· was allowable as a deduction against the business income of the assessee for the assessme.ni year 1950·5 I ?"

The appellant-a limited Company incorporated under the Indian Companies Act, 1913-,-carries on business as managing agents, dealers in shares and stocks, stores -and spare parts of machinery and acts as insurance agents and manufacturers of carbon dioxide.

It also works certain coal mines.

The Company obtained a prospecting licence from the State of Korea for the Chirimiri Colliery in 1944 and after pr0specting for coal sold the colliery, and thereby earned a profit of Rs. 51,550 in the account year 1948-49 and Rs. 8,756 iru the account year 1949-50.

The Income-tax Officer brought the profits arising out of the sale of the colliery to tax as business profits.

The order was confirm ed in appeal by the Appellate Assistant Commissioner and the Income-fax Appellate Tribunal.

The Company conducted a Dry Ice Factory at Lahore. The factory was sold in September 1948 to the Inda-Pakistan Corpo rati001 Ltd. The purchaser took over the factory on October 1, 1948, but the price was finally settled in December, 1949. By the sale the Company suffered a IOss of Rs. 34,891.

The Com pany claimed to deduct this loss from its income assessable to tax m the assessment year 1950-51.

The Income-tax Officer disallowed the claim.

The Appellate Assistant Commissioner agreed with that view, and the Tribunal confirmed the order.

In answering questions ( 1 ) & ( 3) the High Court observed :

"The Chirimiri Colliery was sold after prospecting and proying coal. The sale in such a case was a part of the trading activities of the assessee and such activity co1,1ld be gathered from the surrounding circum stances as also from the manner in which it was sold, that is, within a very short time after its acquisition and after it was made fit for obtainin1t a reasonably higher price at the sale. . . . . . . The profit thus acquired c~ not be treated as a capital asset." ln answering question ( 4) the High Court observed :

"The loss of Rs. 34,891 sustained by the assessee after the sale of Dry Ice Factory at Lahore in September 1948 cannot be treated as a 10ss of the business of sale, inasmuch as the Tribunal found as a fact that the loss not having occurred in the relevant accoumJting

year, was referable to the transaction of business during a period when the business completely ceased before the commencement of the accounting year. . . . "

Counsel for the Company urges that prospecting for coal Ulllder a licence obtained from the State of Korea was not pa.rt of the business operations of the Company and that by selling the rights in the mine, the Company disposed of its assets and made gains of a capital nature. In any event, it was urged, this was a single transaction and in the absence of evidence that the Company carried on the business of obtaining prospecting licences and of selling the mines if "coal was proved", the profit arising out of sale of the mine which was a capital asset acquired by that transaction was not taxable.

Where a person disposes of a part or the whole of his assets the general rule is that the mere change or realisation of an investment does not attract liability to income-tax but where such a realisation is an act which in itself is a trading transaction, profit earned by sale or conversion is taxable : Commissioner of Taxes v. Melbourne Trust Ltd.(') The cases which illustrate this distinction fall broadly into two categories-those where the sales formed part of trading activity, and, those in which the sale or realisation was not an act of trading.

As observed in Califprnian Copper Syndicate (Limited and Reduced) v. Harris (Surve- , vor of Taxes) (') the test is-"Is the sum of gain that has been made a mere enhancement of value by realising l} security, or is it a gailfl made in an operation of business in carrying out a scheme for profit-making ?"

In determining whether the gain is realization of mere enhancement of value or is a gain made in an operation of business in carrying out a scheme for profit-making, l11o uniform rule can be evolved. It was observed by this Court in fanki Ram Bahadur

Ram v. Commissioner of Income-tax(') :

.". . . . . . no single fact has decisive significance, and the question whether a transaction is an adventure ini the nature of trade must depend upon the collective effect of 'all the relevant materials brought on the record. But general criteria indicating that certain facts have dominaint signific'ance in the context of other facts have been adopted in the decided cases. If, for instance, a transaction is related to the business which is normally carried on by 'the assessee, though not directly part of it, an intention to faunch upon an advnture in the nature ..0f -trade may readily bci inferred.

(1) [1914f A.C. 1001, 1010 (P.C.)

(2) 5 T.C. 159, 166.

(3) 57 l.T.R. 21, 25.

SUPllEME COURT REPORTS

[1969] 3 S.C.R.

A similar inference would arise where a commodity is purchased and sub-dividedJ altered, treate'£1 or repaired

and sold, or is converted into a different commodity ll,!ld then sold.

Magnitude of the transaction of purchase, the nature of the commodity, subsequent dealings and the manner of disposal may be such that the transaction may be stamped with the character of a trading venture : . . . . "

A transaction of sale may in a given case be isolated : in another it may be intimately related to the normal business of the tax-payer. In the latter class profit arising from the transaction will probably arise out of the tax-payer's busij!less and will be assessable as business profits. An instructive case of this class is Imperial Tobacco Co. (of Great Britain and Ireland) Ltd. v.

Kelly ( 1). In that case the Company carried on the business of tobacco manufacture, for which large quantities of tobacco leaf were purchased in the United States, where the Company maintained a large buyi111g organisation. To finance the purchases and the expenses of this organisation the Company bought dollars in the United Kingdom through its bankers wh:o remitted them to the banking accounts of the Company in the United States, and it was the practice of the Compapy to accumulate a large holding of dollars each year before the leaf season commenced.

The Company never bought dollars for the purpose of resale as a speculation.

On the outbreak of war, in September 1939. the appellant Company, at the request of the Treasury, stopped all further purchases of tobacco leaf in the United States, and, as a result, the Company had on hand, a holding of dollars accumulated between January and August, 1939.

On September 30, 1939, the Company was ordered under the:_ Defence (Finance) Regulations,

1'39, to sell its surplus do!lars to the Treasury, and, owing to the rise in the rate of exchange, the sale resulted in a profit to the Company.

It was held b_y the Court of Appeal that the profit was liable to be included. as profits of its trade under Sch. D Case I. The tax-payer was not carrying on business in dollars, but the transactions in dollars -were intimately related to their principal business and the profits earned by sale of dollars were treated as profits taxable as business profits.

In T. Beynon &: Co. Limited v. Ogg (Surveyor of Ta.re$(') the tax-payer carrying on business as Coal Merch~'ts. Ship and Insurance Brokers, and as sole selling agent for various Colliery Companies, in which latter capacity it was part of its duty to purchase viagons on half of its clients, bought ii large number of wagons on .his own accOuiIJt with the intention of re-selling them

(I) 25 T. C. 292.

(2) 7 T. C. 125.

at profit.

The contention of the tax-payer that th~ transaction bdng an isolated one, the profit was in the nature of a capital profit on the realisation of an investmQilt was negatived.

The profits realised in this transaction were held to result from the operation of the Company's business and properly includible in the computation of the Company's profits for assessment under Sch. D.

In Gloucester Railway Carriage and Wagon Co. Ltd.

v. The Commissioners of Inland Revenue(') the tax-payer carried on the business of manufacturing wagons for sale or hire. The tax-payer sold some of the wagons which were formerly hired out. The tax-payer contended that the profit realired by sale was an isolated transaction resulting in a capital profit.

The House of Lords held that the "bus\µtess was alJ one", namely, to make profit out of wagons and on that account the profits realized by sale of wagons were taxable.

The Tribunal in the present case recorded .the following findings :

"It is no doubt true that this was a single transaction.

But we were told by the assessec's collnsel that the assessec obtained prospecting licence in the colliery, developed the colliery and then sold out. What was the purpose of obtaining the prospecting licence has not been told to us. The assessee was carrying on business of coal mining. The prospecting of coal is a part of the coal mining business.

Therefore, in our opinion, the transaction of prospecting, develoP.ing and sellin~ the colliery is a transaction in the nature of a busmess.

Therelorc, the profit arising from the sale is a profit in the nature of revenue has been rightly brought to tax."

F Our task would have been lightened if the Tribunal had stated the findings in greater detail.

Nevertheless the Tribunal has found that the Company was carrying on the business of coal mining and prospectiing of coal was a part of the coal mining business and on that account the transaction of prospecting, developing and selling the colliery was a transaction in the nature of a busi- G ness. On the findings recorded by the Tribunal it follows that the prospecting fO!i coal being a part of the coal mining business, the income was properly regarded as taxable. The answer recorded by the High Court on questions ( 1) & ( 3) must be upheld.

Turning to the fourth question : the sale transaction of the Dry Ice Factory was completed on October 1, 1948, but the price wlS finally settled in December 1949. In the settlement, the Company suffered a loss of Rs, 34,891. The loss was suffered in the '

{I) 12 T. C. 720.

8 02

SUPREME COURT REPORTS

business transaction and the ortly dispute raised before the Tribunal related tq the year in which the loss was liable to be taken futo account. The Tribunal disallowed the loss iJll the assessment of income for the year 1950-51.

The Tribunal held that the busi: ness of the Dry Ice Factory was not carried on in the year of account-April 1, 1949 to March 31, 1950, and on that account the loss was not admissible as a permissible deductio, n in computing the taxable income of the Company for the assessment' year

1950-51.

The High Court agreed with the Tribunal.

In our judgment, the High Court was in error iii holding that the, loss was not a permissible deduction.

Section 24 of the Income-tax Act, 1922, in the relevant year of assessment read as follows :

"(1) Where any assessee sustains a loss of profits 1Jr gains in any year under any of the heads mentioned in section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under lljl)y other head in that year : ·

Provided that

( 2) Where any sessee sustains a loss of profits or

ains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March, 1940, under the head profits of business, profession or vocation, and the loss not be wholly set off under sub-section ( 1 ) the portion not so set off shal! be carried forward to the following year and set off against the profits or gains, if any, of the assessee from the same business, profession or vocation for that year :

Provided that

By sub-s. ( 1) the loss or profits or gains suffered under any head in any year was liable to be set off against the income, profits or gains under any other head, and by sub-s. ( 2) where the loss suffered in any business, profession ot vocation could pat be wholly .set off under sub-s. ( 1) the loss not so set off had to be carried forward to the following year and set off against the profits and gains of the same business in the subsequent years. The Tribunal 3jlld the High Court applied sub-s. (2) of s. 24 in C:omputing the taxable income of the Company for the assessment year 1950-51. But in so proceeding, in our judgment, they were in error. The business of Dry Ice Factory was sold in October,

1948. We will assume that the Dry Ice FactQrV was a separate business of the Company and was not a part of the oiher business carried on by the Company. But the price for which the business was sold was settled in December 1949.

Until the price was

.A settled, loss did not accrue or arise to the Company.

The loss was suffered in .the account year 1949-50 and could be allowed against the income of that year uinder s. 24 (l ) . The assulIIPtion that the Joss was suffered in the previous year i.e., 1948-49 was, in our judgment, not warranted.

The case was plainly-governed by sub-s. ( 1) of s. 24. The answer to the fourth questron record- B ed by the High Court must be discharged,

The answers to questions ( 1) & (3) recorded by the High Court are affirmed.

Question ( 4) yvill be answer~ in the affir mative and in favour of the Company. In view of the divided. success, there will be no order as to costs in this Court.

The . order as to costs in the High Court is maintained.

V.P.S.

Appeals allowed in part.

Mii Sup. Cl/69-2

KARAM CHAND THAPAR Ii: BROS. (P)

COMMISSIONER OF INCOME-TAX, (CENTRAL) CALCUTTA

c. SHAH

s. 24(1)

s. 24( 2)

s. 24(1)

s. 24(2)

s. 24( 1)

Sachin Chaudhuri

T. A. Ramachandran

D. N. Gupt11

D. Narsaraju

S. K. Aiyar

R. N. Sachthey

B. D. Shann•

Shah

High Court of. Calcutta

s. 66

Indian Incomtax Act, 1922

Income-tax Act

Income-tax Act

Korea

Lahore

Inda-Pakistan Corpo rati001 Ltd.

October 1, 1948

Chirimiri Colliery

United States

United Kingdom

September 30, 1939

Section 24

Income-tax Act, 1922

section 6

31st day of March, 1940

s. 24

s. 24

s. 24


COMMISSIONER OF INCOMETAX, CALCUTTA, NOW A WEST BENGAL m v.

IMPERIAL CHEMICAL INDUSTRIES (INDIA) PRIVATE

LTD.

February 20, 1969

(J. C. SHAH, V. RAMASWAMI AND A. N. GROVER; JJ.]

Indian Income-tax Act, 1922, ss. 3, 10(2) (xv) and 66(1)-Assessee appointed sole selling agent of principal-Compensation paid to former selling agents through accounts of assessee--Compensation paid through assessee's accounts whether deductible expenditure-Payment whether expenditure IG'id out for purposes of business-Payment whether urtdtr overriding title-Tribunal's finding of fact that compensation was not paid

by assessee under any agreement with principal cannot be interfered with by High Court when question not referred to it.

The Imperial Chemical Industries (Export) Glasgow was a subsidiary of Imperial Chemical dustries London. With effect from 1st April 1948 the former terminated the services of four selling agents in India and in their 'pface appointed the. respondent company (another subsidiary of the Im pert al Chemiclll Industries, London) as their sole selling agents. The four former selling agents were to be paid compensation fo~ the termination of their services and this was done through the accounts of the respondent. In its income returns for the years 1949-50, 1950..51, 1951-52 and 1952-53 the respondent showed as its income the net amount of commission arrived at after deducting from the gross commission the compen sation paid to the former selling agents. The Income-tax Officer in his order for the year 1951-52 held that the said deductions were not permissible. His order was confirmed by the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal. The Tribunal held that there was no agreement between the Imperial Chemical Industries (Export) Glasgow and the respondent company casting on the latter the liability to pay the compensation to the former selling agents out of the commission earned by it; the Tribunal further said that even if there was an agreement it was not acted upon. In reference under s. 66( I) of the Indian Income-tax Act, 1922 the lligh Court took the opposite view and held that the claim made by the respondent company was allowable. The revenue appealed to this Court. The questions that fell for consideration were : (i) whether the High Court was justified in interferin2 with the Tribunal's finding of fact on a question not referred to it;

(ii) whether the compensation amounts paid by the resPond.ent to the former selling agent• were expenditure laid out wholly and exclusively for the purpose of business; (iii) whether the income in question was diverted before it reached the respondent by virtue of an overriding title.

HELD : (i) It is well-established that the High Court is not a Court of Appeal in a reference under s. 66( I) of the Act and it is not open to the High Court in such a reference to embark upon a reappraisal of the evidence and to arrive at findings of fact contrary to those of the Appellate' Tribunal. It is the duty of the High Court while hearing the reference to confine itself to the facts as foand by the Appellate Tribunal and to answer the question of law in the context of those facts.

It is true that the finding of fact will be defective in law if there is no evidence

C.I.T. V. IMPERIAL CHEMICAL LTD. 805

to support it or if the finding is perverse.

But in the hearing of a reference under s. 66(1) Of the Act it is not open to the assessee. to challenge such a finding of fact unless he has applied for the reference of the speoific question under s. 66( 1). [809 B-D]

In the present case the assessee bad in its applications under s. 66(1) expressly raised the question about the validity of the finding of the Appellate Tribunal as regards the agreement but the question was not referred by the Appellate Tribunal to the High Court and the contention of the assessee with regard to the question must be deemed to have been .rejected. The assessee did not thereafter move the High Court under s. 66(2) of the Act requiring it to call for a statement of the case on that specific question.

The High Court was therefore in error in embarking upon a reappraisal of the evidence before the Appellate Tribunal and setting aside the finding of the Appellate Tribunal that there was no agreement as claimed by the assessee for the payment of compensation to the former selling aents out of its own commission and that if there was such an agreement it was not acted upon. [809 F-H]

India Cements Ltd. v. Commissioner of Income-tax, 60

I.T.R. 52, Commissioner of Income-tax v. Sri Meenakshi Mills Ltd., 63 J.T.R. 609 and Commissioner of Income-tax, Bombay City 1 v. Greaves Cotton cl Co.

Ltd., 68 I.T.R. 200, applied.

(ii) In the absence of proof of the exact terms and condit.ions of the agreement it was not possible to accept the argument that the amount paid as compensation to the ex-agents was an 'expenditure laid out wholly and exclusively for !he purpose of the business under s. 10(2) (xv) of the Act. [810 DJ

(iii) The assessee's documents suggested that the payment of compensation was the exclusive liability of the I.C.I. (Exports) Ltd. and the assessee was not under a legal obligation to pay the amount of compensa~ tion to the outgoing agents.

It was not established that the payment of compensation was by an ove'rriding title created either by the Act of the parties or by the operation of law.

An obligation to apply the income in a particular way before it is received by the assessee or before it has accrued dr arisen to the assessee results in the diversion of income.

An obligation to apply income accrued, arisen Or received amounts merely to the apportionment of income and the income so applied is not deductible. The true test for the application of the rule of diversion of income by an overriding title is whether the amount sought to be deducted in truth never reached the assessee as his income. [810 H-811 HJ

Raja Bejoy Singh Dudhuria v. Commissioner of Income-tax, [1933] 1 I.T.R. 135, P .. C. Mullick v. Commissioner of Income-tax, [1938] 6 I.T.R. 206 and Commissioner of Income-tax, Bombay City 11 v. Sitaldas Tirathdas, 41 I.T.R. 367, applied.

CML APPELLATE JURISDICTION: Civil Appeals Nos. 1549 to 1552 of 1968.

Appeals from the judgment airld order dated September 28, 1964 of the Calcutta High Court in Income-tax Reference No. 18 1961.

Sukumar Mitra, S. K. Aiyar, R. H. Dhebar, R. N. Sachthey and B. D. Sharma, for the appellant (in all the appeals).

M. C. Chagla, T. A. Ramachandran and D. N. Gupta, for the A respondent (in all the appeals) .

The Judgment of the Court was delivered by

Rama.swami, J. These appeals are brought by certificate from the judgment of the Calcutta High Court oated 28th September, 1964 in Income Tax Reference No. 18 of 1961.

The respondent (hereinafter called the assessee) is a private limited company incorporated in India a.nd is a subsidiary of the Imperial Chemical Industries, London, which holds the entire share capital of the assessee.

The business of the assessee consists mainly of acting as selling agents in India for a large variety of goods such as chemicals, dyes, explosives etc., manufactured or purchased by its London principals and sold in India. The Imperial Chemical Industries (Export) Glasgow [hereinafter referred to as the LC.I. (Export) Ltd.] is another subsidiary of LC.I.

London which holds the entire share capital of LC.I. (Export) Ltd.

The l.C.I. (Export) Ltd. had appointed as their selling agents in India four companies, viz., ( 1) Gillanders Arbuthnot & Co. Ltd., Calcutta, (2) Best & Co. Ltd., Madras, (3) Anglo-Thai Co. Ltd. Bombay and ( 4) Shaw Wallace & Co. Ltd.

With effect from 1st April, 1948, the l.C.I. (Export) Ltd. terminated the services of the aforesaid selling agents and appointed the assessee as its sole selling agent. The I.C.I. (Export) Ltd. had agreed to pay to the former selling agents compensation at the rate of two fifth, two fifth and one and two fifths of the commission earned by the assessee for the three years from 1st April, 1948. The compensation was paid to the four companies through the accounts of the assessee.

For this purpose the modus operandi adopted was as follows :-The compensatiQD. payable to the former agents was spread over a period of three years and on the assumption that the turnover was constant, the compensation payable to the selling agents was on an average, an amount equal to the I 1/15th of the commission earned by the assessee at the 1normal rates. In order to a•rive at the amount of commission to be credited to the assessee's profit and loss account each year the as•essee in the first place credited the commission account and debited the I.CI.

(Export) Ltd. account with the full amount of compensation earned by it at normal rates on sales effected during the year.

Next, the assessee transferred from the commission account to a special reserve account called the 'Exp1osives Ex-Airents Compensation Reserve Account', the proportion payable to the exagents as compensation, namely, II/15th (2/5+2/5+7l5= 11/5 x 1/3 = 11/15) (leaving 4/15th towards commissioo account) so that funds misi; ht be accumulated for payment to the four companies from time to time.

The year of account of the assessee is from 1st October to 30th September every year.

As a result of the above method of accounting, the following figures appeared in the assessee's books of accounts :-

Gross Transfer to Net Commission Reserve for Commission

compensati on

Rs.

Rs.

Rs.

1st April 1948 to 30th September I 948 .. 2,91,396 2,03,503 87,893 Year ending 30th September 1949 •• 7,67,294 5,41,526 2,25,768

Year ending 30th September 1950 7,52,204 5,29,284 2,22,920

Year ending 30th September J951

I0,20,922 4,00,052 6,20,870

TOTAL 28,31,816 16,74,365 11,57,451

For the assessment years 1949-50, 1950-51, 1951-52 and 1952-53 the assessee showed the net amounts of commission earned on the selling agencies by the I.C.I. (Export) Ltd. adding a foot note that the amounts were arrived at after deducting the amount of compensation payable to the out-going agents. By his order dated 28th January, 1957 for the assessment year 1951-52 the Income Tax Officer held that the deductions were not pennissible. In an appeal preferred by the assessee the Appellate Assis- •ant Commissioner confirmed the assessment by his order dated .<5th November, 1957. The assessee took the matter in further appeal to the Appellate Tribunal which dismissed the appeal. The Appellate Tribunal held that there was no justification for the abence of a written agreement between the I.C.I. (Export) Ltd. dl!d the assessee when the former selling agencies were terminated an '. the assessee was appointed as the sole selling agent. It was ob.; erved that the assessee was not collecting any commission on behalf of the outgoing agents and it was not their legal obligation to pay compensation to the out-going agents. If the assessee was noi entitled to more than 3/5th of commission during the first

two years, it should have credited that amount whereas the assessee had actually credited four-fifteenth on a notional basis which was not in consonance with the arrangement. The conclusion reached by the App.ellate Tribunal was that "there was no agreement between the assessee and the I.C.I. (Export) Ltd, and if there was one it was not acted upon".

It was held by the Appellate Tribunal' that the payment of compensation was not becacse of an overridin title created either by the act of the parties or by operation of Jaw.

At the instance of the assessee the following question of law wa, s referred to the High Court under section 66 ( 1 ) of the Income-

Tax Act, 1922 (hereinafter called the Act) :-

"Whether the inclusion by the Income Tax Officr.r of Rs. 2,03,503, Rs. 5,41,526, Rs. 5,29,284 and Rs. 4,00,052 in the assessment for the years 1949-50, 1950-51, 1951-52 and 1952-53, for relevant accounting years ending the 30th Sept. 1948, 1949, 1950 and 1951 respectively in the computation of the total income of the assessee is justified and correct ?"

The High Court answered the question in the negative in favour of the assessee holding that the inclusion of the amount of compensation in the total income of the assessee for the relevant assessment years was not justified.

On behalf of the appellant it was contended that the High Court had no legal justification for interfering with the finding of the Appellate Tribunal that there was no proof of the agreement between the assessee and the I. C. I. "(Export) Ltd. with regard to the quantum of commission to be paid to the assessee for the period between 1st April, 1948 and 31st March, 1.951.

On this point reference was made by Mr. Chagla to (a) the Jetter dated 11th March, 1947 from the I.C.I. (Export) Ltd. to M/s.

Gillanders Arbuthnot & Co., (b) the affidavits of Mr. W. A. Bell and Mr. J. W. Donaldson and ( c) the Jetter dated 3rd January, 1958 of M/s. Lovelocke and Lewes, Chartered Accountants, Calcutta.

It was argued that these documents established that there was an agreement between the I.C.I. (Export) Ltd. and the assessee, that for the period !st April 1948 to 31st March, 1951 the assessee was entitled to receive as its commission only the amounts representing the difference between the normal rates of commission and the compensation payable to the former agents during that period. The Appellate Tribunal had considered all these documents and reached the conclusion that there was no agreement between the I.C.I. (Export) Ltd. and the assessee and 'if there was one it was not acted upon'. The Appellate Tribunal remarked that the letter dated 11th March, 1947 from the I.CJ. (Export) Ltd. set forth only the terms and conditions subject to which the selling agencies of the out-going agents were terminated.

It was silent on the crucial question of commission to be paid to the assessee during the three years from the date of its appo; ntment as sole selling agent.

The affidavits of Mr. Bell and Mr.

Donaldson were produced for the first time before the Appeltate Assistant Commissioner.

The affidavits were made. tnany years after the cru<; iaJ date of the appointment of the asse<•ee as the . sole selling agent of the I.C.I. (Export) Ltd.

The affidavits did not mention the amount of commission to be paid to the out-2oing agents and the affidavits were also not consistent with the entries in the books of accounts of the assessee. The letter of M/s Lovelocke and Lewes was produced at a very late stage during the hearing of the appeal before the Tribunal and even otherwise the

~ merely explains the method of accounting adopted by the ••sessee and did not carry the matter any further. In the circumstances, the Appellate Tribunal held that there was no agreement between the assesseo and the I.CJ. (Export) Ltd. and if there was any such agreement it was not acted upon. It is manifest that the finding of the Appellate Tribunal on this question is a finding on question of fact and the High Court was not entitled to interfere with this finding. It is well established that the High Court is not.a Court of Aweai in a reference under s. 66(1) of the Act andit is llot open to the High Court in such a reference to embark upon a reappraisal of the evidence and to arrive at findings of fact contrary to those of the Appellate Tribunal. It is the duty of the High Court whilC hearing the reference to confine itself to the facts as found by the Appellate Tribunal and to answer the question of law in the context of those facts. It is true that the finding o( fact will be defective law if there is no evidence to support it or if the finding is perverse. But in the hearing of a reference under s. 66(1) of d,!e Act it is not open to the assessee to challenge such a finding of fact unless he has applied for the reference of the 0 specific question under s.66(1 ). In India Cements Ltd .. v.

Commissioner of Income Tax(') it was held by this Court that in a reference. the High Court must accept the findings of fact reached by the Appellate Tribunal and it is for the party who applied for a reference to challenge those findings of fact, first, by an

applicatioo. under s. 66 ( 1 ) . If the party concerned has failed to file an application under s. 66( 1) expressly raising the question about the validity of the finding of fact, he is not entitled to urge before the High Court that the finding is vitiated for any reason.

The same view has been expressed by this Court in Commissioner of Income Tax v. Sri Meenakshi Mills Ltd.(') and Commissioner

of Income Tax, Bombay City Iv. Greaves Cotton & Co. Ltd. (8).

In the present case the assessee has in his application under s. 66 ( 1) expressly raised the question about the validity of the

fing of the Appellate Tribunal as regards the agreement but the questjon was not refer.red by the Appellate Tribunal to the High <;:ourt and the CQiltentJon of the assessee with regard to the quesuon must be deemed to have been rejected. The assessee did not

!heafter move the High Court under s. 66(2) of the Act requirmg 1t to call for a sta~t of th.I) case on that specific question.

We are. therefore ofopllllon that the High Court was in error in embarkmg upon a reappraisal of the evidence before the Aopellate Tribunal and setting aside the finding of the Appellate Tribunal. that "there .was no agreement as alleged in the affidavits of Mr, W. A. BeU and Mr. J. W. Donaldson" and "if there was such an agreement it was not acted upon".

(I) 60 I.T .R. 52.

(2) 63 I.T.R. 609.

(3) 68 I.T.R. 200.

It was argued by Mr. Chagla that even if the agreement was not established, the amount paid by the assessee as compe, nsation to the ex-agents was an expenditure laid out wholly and exclusively for the purpose of the business and as such is allowable under s. 10 ( 2 )(xv) of the Act. The contrary view point was urged on behalf of the appellant. It was Pointed out that the assessee was acting as the agent of the l.C.I. (Export) Ltd. for the payment of compensation to the ex-agents and the payment was made not in the character of a trader but in the character of the agent of its principal. The contention of the appollant was that the assessee got the right to sell goods after 1st April 1948 and for getting that right the assessee parted with a portion of its commission for the first two years after 1st April 1948 and paid very much more than the commission earned in the third year. This position was borne out by the accounts of the respondent which show that the assessee received the commission at full rates and out of it created a reserve account of which these compensations were made to the ex-agents.

We have already referred to the finding of the Appellate Tribunal that no agreement between the assessee and the I.C.I. (ExPort) Ltd. has been proved. , In the absence of proof of the exact tenns and conditions of the agreement it is not possible to accept the argument of the assessee that the amount paid as compensation to the ex-agents was an "expenditure laid out wholly .aind exclusively for the purpose of the business" under s. 10(2)(xv) of the Act.

It was finaUy contended on behalf of the resPondent that by virtue of an overriding title the income was diverted before it reached the assessee, and so, the amount of compensation paid to the ex-agents did not form part of the income of the assessee. In other words,_ the contention was that the compensation payable to the ex-agents was diverted from the income of the assessee by an overriding title arising under th_e agreement between the assessee and the I.CJ. (Export) Ltd.

The argument was stressed that the commission payable as compensation to the ex-agents did not form part of the income of the assessee.

We are unable to accept this argument as correct.. 'We have already Pointed out that the finding of the Appellate Tribunal is that the precise terms of the agreemnt between the assessee and the I.C.I, (ExPort) Ltd. have not been established. In any event, even on the basis of the affidavits of Mr. Bell and Mr. Donaldson the payment of compensation to the ex-agents was apparently made bv the assessee for and on behalf of the I.C.I. (Export) Ltd.

The assessee's documents suggest that the payment of compensation was the exclusive liability of the I:C.I. (Export) Ltd. and the assessee as not uEder a le¥al obligation to pay the aount of compensation to the out-gong agents. It is not established that the payment of compensatt?n was by an overriding title created either by the act of the parties

or by the operation of law.

An obligatioino to apply the income in a particular way before it is received by the assessee or Before it has accrued or arisen to the assessee results in the diversion oi. income. An obligation to apply income accrued, arisen or received amounts merely !!> the apportionment of income and the income so applied is not deductible. The true test for the applicati0\11 of the rule of diversion of income by an overriding title is whether the amount sought to be deducted in truth never reached the assessee as his income.

The leading case on the subject is Raja Bejoy Singh Dudhuria v. Commissioner of Income Tax(') where the step mother of the Raya had brought a suit for maintenance amid a compromise decree was passed in which the step mother was to be paid Rs. 1,100 per month, which amount was declared a charge upon the properties in the hands of the Raja by the Court.

The Raja sought to .deduct this amount from his assessable inco~: 1 which was disallowed by the High Court at Calcutta. On apJ?Cll' to the Judicial Committee Lord Macmillan observed as follows :-

"But their Lordships do not agree with the learned Chief Justice in his rejection oi. the view that the sums paid by the appellant to his step mother were not 'income' of the appellant at all. This \II their Lordships' opinion is the true view of the matter.

When the Act by section 3 subjects to charge 'all income' of the individual, it is what reaches the individual as income which it is intended to charge. In the present case the decree of the court by charging the appellant's whole resources with a specific payment to his step-mother has to that extent diverted his income from him. and has directed it to his step-mother; to that extent what he receives for her is not his income. It is not a case of the application by the appellant of part of his income in a particular way, it is rather the allotion of a sum out of his revnue before it becomes income in his hands".

Another case of the Judicial Committee is reported in P. C. Mullick

v. Commisisoner of Income Tax('), where, a testator appointed the appellants as executors and directed them to pay Rs. 1 O 000 out of th~ income on the occasion of his addya sradh. The 'executors paid Rs. 5,537 for such expenses, and sought to deduct the amount from the assessable income. The Judicial Committee confirmed the decision of the Calcutta High Court disallowing the deduction and observed that the payments were made out of the income of the estate coming to the hands of the executors and in

pursuan~. of an oligation imposed upon them by the testator.

The Jud1c1al Committee observed that it was not a case in which

(I) [1933] 1 l.T.R. 135.

(2)'[1938] 6 I.T.R. 206.

a portion of the income had been diverted by an overriding title from the person who would have received it otherwise and distinguished Bejoy Singh Dudhuria's case('). In Commissioner of .Jncome Tax Bombay City II v. Sitaldas Tirathdas('), Hidayatullah, J., speaking for the Court observed as follows :-

"There is a difference between an amount which a person is obliged to apply out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee. Where by the obligation income is diverted before it reaches the assessee, it is deductible; but where the income is required to be applied to disCharge an obligation after such income reaches the assessee, the same cqnBequence, in law, does not follow. It is the first kind of payment which can truly be excused and not the second.

The second paymqn.t is merely an obligation to pay another a portion of one's inme, which has been received and is since applied. The first is a case in which the income never reaches the assessee, who even if he were to collect it, does so, not as part of his income,' but for and on behalf of the person to whom it is payable".

In view of the principle laid down in these authorities we are of opinion that the payment of compensation , by the assessee to the ex-agents was not by an overriding title created either by act of the parties or by operation of law.

We accordingly reject the argument of Mr. Chagla onl this aspect of the case.

For the reasons expressed we hold that the judgment of the Calcutta HiglrCourt dated 28th September, 1964 should be set aside and the question referred by the App:l!ate Tribunal should be answered in the affirmative and agamst the assessee.

The appeals are accordingly allowed with costs. One hearing fee.

G.C.

Appeals allowed.

(1) (1933) I.T.R. 135.

(2) 41 I.T.R. 367.

COMMISSIONER OF INCOME-TAX, CALCUTTA, NOW WEST BENGAL III

February 20, 1969

C. SHAH

V. RAMASWAMI

A. N. GROVER

Indian Income-tax Act, 1922

ss. 3, 10(2)

Imperial Chemical dustries London

1st April 1948

India

Im pert al Chemiclll Industries

London

s. 66( I)

Indian Income-tax Act, 1922

s. 66( I)

s. 66(1)

s. 66( 1)

s. 66(1)

s. 66(2)

s. 10(2)

I.C.I. (Exports) Ltd.

Sukumar Mitra

S. K. Aiyar

R. H. Dhebar

R. N. Sachthey

B. D. Sharma

M. C. Chagla

T. A. Ramachandran

D. N. Gupta

Rama.swami,

Imperial Chemical Industries, London

LC.I. (Export) Ltd.

LC.I.

London

l.C.I. (Export) Ltd.

Gillanders Arbuthnot & Co. Ltd.

Calcutta

Best & Co. Ltd., Madras

Anglo-Thai Co. Ltd. Bombay

Shaw Wallace & Co. Ltd.

1st April, 1948

I.C.I. (Export) Ltd.

I.CI.

(Export) Ltd.

I.C.I. (Export) Ltd

section 66

Tax Act, 1922

I. C. I. "(Export) Ltd.

Chagla

W. A. Bell

J. W. Donaldson

31st March, 1951

11th March, 1947

I.CJ. (Export) Ltd.

Bell

Donaldson

Lovelocke

Lewes

s. 66(1)

s. 66(1)

s.66(1 )

s. 66

s. 66( 1)

s. 66

s. 66(2)

W. A. BeU

s. 10

I.C.I. (ExPort) Ltd.

s. 10(2)(xv)

I.C.I, (ExPort) Ltd.

I:C.I. (Export) Ltd.

Macmillan

section 3

Calcutta High Court

Bejoy Singh Dudhuria

Hidayatullah

Calcutta HiglrCourt

28th September, 1964


H.V.KAMATH

CH. NITIRAJ SINGH

February 24, 1969

[S. M. SIKRI, R. S. BACHAWAT AND K. S. HEGDE, JJ.j

Representation of People Act (43 of 1951), s. 123--Government fasued Ordinance henefitinJ? certain agriculturists prior .fo election-Successful candidate's party in power-Allowances granted to Government

employees-Du111111y pa111phlets omitting unJ'uccessful candidate's election s_rnzbol-Whether an1~)11nt.s to corrupt practice.

The appellant, an unsuccessful candidate filed an election petition tor setting aside the election of the respondent who got elected as a Congress candidate to a Parliamentary constituency.

The respondent was chraged with several corrupt practices, viz.. (i) by an ordinance the Government of the State in which the Congress Party was in power, granted exemption to certain agriculturists' holdings from payment of land revenue and the Chief Minister announced the bonefit though the exemption was claimed for snmetime past by the opposition parties the ordinance was passed prior to the election; the opposition parties started a campaign stating that the object of the exemption was to forfeit the land; the Chief Minister refuted the charge and told the voters that the exemption should be granted and that the opposition parties should be routed in the election; a member of the Conress Party-D, published a pamphlet refuting the false propaganda that exemption was temporary and urging the electors to vote for the Congress; (ii) the Chief Minister on the eve of the election announced inc'reased dearness allowance to rtain Government employees; (iii) the respondent or bis agent distributed dummy ballot papers with the respondent's name and his election symbol, and also that of appellant's name but without 'his election symbol printed thereon, thereby conveying an impression tht the appet1ant had withdrawn his candidature, and further, that the respondent and his agents on the eve of the election told the voters that the appellant had withdrawn, so the respondent had committed corrupt practice under s. 123(4); and (iv) a member of the police force in the service of the Government with the consent of the respondent actively canvassed for the respondent, thereby committing corrupt practice under s. 12'3(7). The High Court dismissed the petition,

HELD : The appeal must be dismissed.

(i) On the materials, on the record,. it was impossible to hold that the respondent committed the corrupt practice under s. 123(1)A. The ordinance was passed by the Government of Madhya Pradesh. As a result of the ordinance a large number of agriculturists got exemption from land revenue.

Such an exemption did not amount to a gift, offer or promise of any gratification within the meaning of s. 123 ( 1 )(A) nor was it possible to say that the Government was the agent of the respondent.

The Congress Party was then in Power. But the exemption was not given by the Congress Party. It was given by the Ordinance which was passed by the Government. Nor does the announcement of the declaration by the Chief Minister or by the pamphlet carry the matter any ful'ther. It was not possible to say that either the Chief Minister or D acted as the agent of the respondent. [815 GJ

(ii) The grant of the increased dearness allowance could not be re- A garded as a gift, offer or promise of any gratification within the meaning of s. 123(l)(A) nor it was possible to say that the Government or the Chief Minister was the agent of the respondent. The employees of the Government had given notice to go on strike a week before the election and without their cooperation the entire election would have been at a standstill. The Government thought that the demand of the employees was legitimate and therefore announced it on the eve of the election to B meet it. !816 D-F]

(iii) The dummy ballot papers were in contravention of the instructions issued by the Election Commission of India. The appellant's name should not have been printed in them. But it was impossible to say that the dummy papers conveyed to the voters the impression that the appellant had withdrawn his candidature. The statement of the appellant's witnesses could not be accepted that on the eve of the election the respondent and C his agents informed the voters that the appellant had withdrawn his candidature.

The voters knew that there were two candidates in the field.

Even a few days prior to the election the Chief Minister stated that the appellant was contestin2 the election. The respondent carried on rigorous election propaganda till the last day. [816 HJ

(iv) On the evidence the charge that the member of the police force <anvassed for the respoqdent was not established.

CML APPELLATE JURISDICTION: Civil Appeal No. 1517 of 1968.

Appeal under s. 116-A of the Representation of the People Act, 1951 from the judgment apd order dated March 13, 1968 of the Madhya Pradesh High Court, Indore Bench in Election Peti- I: tion No. 45 of 1967.

K. A. Chitaley, Y. S. Dharmadhikari, S. S. Khanduja - and K:. B. Rohatgi, for the appellant.

G. N. Dikshit, for the respondent.

The Judgment of the Court was delivered by

Bachawat, J. This appeal is directed against the judgment of a Single Judge of the High Court of Madhya Pradesh dismissing an election petition for setting aside the election of the respondent Chaudhury Nitiraj Singh to the Hoshangabad Parliamentary Constituency No. 27. The appellant was the Praja Socialist Party candidate with the election symbol "hut". The respondent was the Congress Party Candidate with the election symbol "Two bullocks with voke on".

The voting took place on February 20,

1967. The votes were counted on February 21 and February 20,

1967. The respondent having got a majority of about 20,000 votes was declared duly elected. The oetition charged the re>pondent with seve•al corrupt practices. The appellant now presses before

us only the charge unde' parap; raph 5(i), (ii). (iii) and (iv), oaragraph 5(v), paragraph 6 and paragraph ?(ii),

I!'

At the time of the election, the Congress Party, was in power and the Chief Minister Shri D. P. Mishra be1onged to the Congress Party. In November 1966 the respondent was nominated by the Coogress Party as its caµdidate for the Hoshangabad Parliamentary Constituency. The substance of the charge as made in paragraph 5 (i), (ii), (iii) and (iv) and as pressed before us is that on December 23, 1966 the Government of Madhya Pradesh headed by Shri D. P. Mishra promulgated an Ordinamce No. 19 of 1966 exempting agriculturists holdmgs land less than 7 .50 acres or payip.g land revenue not exceeding Rs. 5 from payment of land revenue, that Shri D. P. Mishra as the agent of the respondent and with his consent made speeches at Narsinghpur and Piparia on February 16, 1967 announcing the benefit of such exemption and that the respondent thus committed the corrupt practice under s. 123 (1 )(A) of the Representation of the People Act, 1951.

The evidence shows that the question of exemption of uneconomic holding from payment of land revenue was being agitated for some time past Towards the close of 1966 a resolution was moved by the members of the opposition parties in the Madhya Pradesh Vidhan Sabha urging such exemption.

But no bill to that effect was then passed.

The Government reconsidered the matter aiDd when the Vidhan Sabha was not in session it passed Ordinance No. 19 of 1966 granting the exemption. The Ordinance was later replaced by Act. No. 6 of 1967 which was published on April 26, 1967. The exemption was advocated by the P•aja Socialist Party also and was welcomed by all parties. Nevertheless on the eve of the election the opposition parties started a campaign stating that the object of the exemption was to forfeit the land to the State and raised the slogan "Lagan Maaf Zamin Saar'.

The propaganda was refuted by the Con11; ress Party. In an election speech on February 16, 1967 Shri D. P. Mishra raised the slogan "Lag3ill Miraf Sab party Saaf".

His

objct yvas to tell the voters that the exemption should be granted and that the opposition parties should be routed in the election. It also appears that one Shri S. K. Dixit a member of the Cong•ess PartY. published a pamphlet Ex. P-2 on or about February 7, 1967 refuting the false propag:anda that the exemption was temporary and was granted with a view to forfeit the lands and ugiing the electors to vote for the congress.

On the materials on the record it is impossible to hold that the respondent committed the corrupt practice under s. 123 (1 )(A). The O•dinance was passed by the Government of Ma'1hya Pradesh. As a result of the Ordinance a large number of agriculturists got exemption frnm land revenue.

Such an exemption does not amount to a gift. offer or promise of any l!Tatification within the meaning of s. 123(1 )(A). Nor is it possible to sav that the eovemment was th~ agent of the respondent. It is true that the Cong•ess Partv was then i; o power.

But the exemption was not eiven bv the Conss Partv.

It was given by the Ordinance which was passed by the Government. Nor does

the announcement of the declaration at the meeting held on February 16, 1967 or by the pamphlet Ex. P-2 cax:ry the matter any further. On the materials on the record it is not possible to say that either Shri D. P. Mishra or Shri S. K. Dixit acted as the agent of the respondent. The charge under :paragraph 5 ( i), (ii) , (iii) and (iv) is not established. Some additional embellishments of the charge were dealt with by the learned Judge <md they were not pressed before us.

The substance of the charge as laid in paragraph 5 ( v) and as pressed before us is that on the eve of the election the Government of Madhya Pradesh headed by Shri D. P. Mishra declared that Class III and Class IV government employees would get increased dearness allowance from April 1, 1967 according to the rates sanctioned for Central GovelJillllent employees, that Shri D. P.

Mishra with the consent of the respondent and as his agent announced the grant of these benfits at the meetings held on February 16, 1967 at N<!rsinghpur aiid Piparia a:nd that the respondent thus c01nmitted the corrup_t practice under s. 123(1) (A). It appears that Class III and Class IV employees gave a notice to the government . stating that they would go on strike with effect from February 13, 1967. Without their co-operation the entire election would have been at a standstill.

The Government thought that the demand of the employees for i, rl.creased dearness allowance was legitimate and therefore announced on or about February 11, 196,7 its decision to grant the increased dearness allowance with effect from April l, 1967. The grant of the increased dearness allowance cannot be regarded as a gift, offer or promise of gratification within the meaning of s. 123(1) (A) nor is it possible to say that the Government or Shri D. P. Mishra was the agent of the respondent. The announcement of the grl!J11t of the increased dearness allowance at the meeting held on February 16, 1967 does not carry the matter any further.

The charge under paragraph 5 ( v) is not established.

The charge under paragraph 6 is that the respondent or his ageint distributed dummy ballot papers with the respondent's name and his election symbol of "Two bullocks with yoke on" and, also the appellant's rrame without his election symbol printed thereon, that those papers conveyed to the voters the impression that the appellant had withdrawn his candidature, that the appellant and hts agents qn the eve of the election told the voters that the appellant had withdrawn his candidature and that the respondent thereby committed the corrupt practice under s. 123 ( 4). The evidence shows that dummy ballot papers as mentioned above were printed and distributed on behalf of the respondent. Such dummy ballot papers were in contravention of the ilnstructions issued by the Election Commission of India. The appellant's name should not have

been printed in them. But it is impossible to say that the dummy ballot papers conveyed to the voters. the impression that the appellant had withdrawn his candidature. On this issue the appellant exam'1ed P.W. 6, PW 7, PW 10, PW 23, PW 25, PW 27, PW 29, PW 30, PW 31 and PW 32 and the respondent examined RW 2, RW 3, RW 11 and RW 13. In agreement with the learned Judge we do not accept the statement of the appellant's witnesses that on the eve of the election the respondent apd his agents informed the voters that the appellant had withdrawn his candidature. The voters knew that there were two candidates in the field, viz., the appellant and the respondent. Even on February 16, 1967 Shri D. P. Mishra stated that the appellant was contesting the election.

The respondent carried on a vigorous election propaganda until February 18, 1967. If the respondent or his agent had informed the voters that the appellant had with.drawn his candidature it was not likely that such inteinsive propaganda would be carried on onti! that date. The charge under paragraph 6 is therefore not established.

The charge under paragraph 7 (ii) was that Chaudhary Diwan Singh, the Station House Officer at Sohagpur, and a member of. the police force in the service of the government, with the consent of the respondent actively cain'Vassed for the respondent and that the respondent thereby committed corrupt practice under s. 123 (7).

To prove this charge the appellant examined PW 3, PW 4 and PW 9.

Chaudhary Diwan Singh and the respondent denied the charge. For the reasons given by the learned Judge, it is impossible to accept the testimquy of PW 3, PW 4 and PW 9. Their evidence does not ring true: P.W. 3 never spoke to anybody that he was asked by Chaudlrary Diwan gh to vote for the respondent. t is not likely that. Diwan 'Singh would approach P. W. 4.

It is impossible to believe that P.W. 9 could overhear a conversation between Diwan Singh aind, the respondent when the respondent is said to have asked Diwan Singh to canvass for him. the charge under paragraph 7 (ii) is also not established.

In the result, the appeal is dismissed with costs.

Y.P.

Appeal dismissed.

H.V.KAMATH

CH. NITIRAJ SINGH

February 24, 1969

S. M. SIKRI

R. S. BACHAWAT

K. S. HEGDE, JJ

Representation of People Act

s. 123

Government of the State

s. 123(4)

s. 12

s. 123(1)

Government of Madhya Pradesh

s. 123

s. 123(l)(A)

Election Commission of India

s. 116

Representation of the People Act, 1951

K. A. Chitaley

Y. S. Dharmadhikari

S. S. Khanduja

K:. B. Rohatgi

G. N. Dikshit

Bachawat

High Court of Madhya Pradesh

February 20,

1967

Congress Party

D. P. Mishra

Hoshangabad

December 23, 1966

Narsinghpur

Piparia

February 16, 1967

s. 123

Representation of the People Act, 1951

Madhya Pradesh Vidhan Sabha

April 26, 1967

P•aja Socialist Party

S. K. Dixit

February 7, 1967

s. 123

Government of Ma'1hya Pradesh

s. 123(1 )(A)

April 1, 1967

D. P.

Mishra

s. 123(1)

February 13, 1967

February 11, 196,7

April l, 1967

s. 123(1)

s. 123

February 18, 1967

Chaudhary Diwan Singh

Sohagpur

s. 123

Chaudhary Diwan Singh

Chaudlrary Diwan

Diwan 'Singh

Diwan Singh


COMMISSIONER OF INCOME TAX, MADRAS A v.

S. CHENNIAPPA MUDALIAR, MADURAI

February 24, 1969

[J. C. SHAH, V. RAMASWAM! AND A. N. GROVER, JJ.]

Income Tax Act 1922, section 33(4)-Appellate Tribunal Rules !946; Rule 24-lf Appellate Tribunal has powers to dismiss appeal for default in appearance-Whether Tribunal bound to pass orders on merits-If rule 24 ultra vires section 33(4).

The respondent's appeal against an order of assessment was rejected by the Appellate Assistant Commissioner and he, the -.after appealed to C the Appellate Tribunal. The Tribunal, after having granted some adjournments, dismissed the appeal for default in appearance Qn a day fixed for the hearing, purporting to do so under rule 24 of the Appellate Tribunal Rules, 1946. The Hih Court directed the Tribunal to refer two questions to itself, one relating to the merits and the other to the effect whether rule 24 of the Appellate Tribunal Rules, 1946, in so far as it enabes the Tribunal to dismiss an appeal in default in appearance, is ultra vlres. A D special bench of the High Court took the view that under section 3 3 ( 4) the Tribunal was bound to dispose of the. appeal on the merits, whether the appellant was present or not.

On appeal to this Court,

HELD : It follows from the language of s. 33 ( 4) and in particular the use of the word "thereon" that the Tribunal has to go into the cor- E rectness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned bad failed to appear, [824 C-D]

The provisions contained in s, 66 about making a reference on QUO$• lions of law to the High Court would be rendered nugatory if a power is F attributed to the Appellate Tribunal by which it can dismiss an appeal, which has otherwise been properly filed, for default, without making an order thereon in accordance with s. 33(4). So far as the questions of fact are concerned the deci:sion of the Tribunal is final and reference can be sought to the High Court only on questions of law. The High Court exercises purely advisory jurisdiction and has no appellate or revisional powers. The advisory jurisdiction can be exercised on a proper reference being made and that cannot be done unless the Tribunal itself bas passed G a proper order under s. 33(4). [824 E-H]

Rule 24 clearly comes into conflict with section 33(4) and in the event of repugnancy between the substantive p'rovisions of the Act and, a rule, it is the rule which must give way to the provisions of the Act. [825 HJ

Shri Bhtgwan Radha Kishen v. Commissioner of Income tax, U.P. 22 l.T.R. 104; Ruvula Subba Rao & Ors. v. Commis.<ioner of Income tax H MttdMs, 27 l.T.R. 164; Mangat Ram Kurhiala & Ors. v. Commissioner of Income tax, Punjab, 38 I.T.R. 1; Hukumchand Mi/ls Lrd. v. Commissioner of Income tax, Central Bombay, 63 I.T.R. 232; Com'11issloner of lnco1118

tax Madr/18 v. Mtt. Ar. S. Ar. Aru11JJcha/am Ch<ttiar, 23 I.T.R. 180 and Co1nmissioner of Income tax, Bombay v. Scirtdia Steam Navigation Co.

Ltd. 42 J.T.R. 589, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1015 of 1968.

Appeal from. the judgment and order dated April 30, 1964 of the Madras High Court in T.C. No. 194 of 1961 (Reference No. 74 of 1961).

D. Narsaraju, R.H. Dhebar, R. N. Sachthey and B. D. Sharma, for the appellll\.'lt.

R. Gopalkrishnan and R. Ba/asubramaniam, for the respondent.

The Judgment of the Court was delivered by Grover, J.

This is an appeal by certificate from a judgment of the Special Bench of the Madras High Court in which the sole question that has to be determined is whether Rule 24 of the Appellate Tribunal Rules, 1946, insofar as it enables the Tribunal to dismiss an appeal for default of appearance was ultra vires the provisions of s. 33 of the Income tax Act, 1922, hereinafter called the "Act".

The facts which gave rise to the reference which was made to the High Court by the Appellate Tribunal lie within a narrow E compass. The assessee owned 1674 shares in Asher Textiles Ltd. and 9 out of 20 shares in Textile Corporation (Private) Ltd. t Tiruppur. The latter company was the managing agents of the Asher Textiles Ltd. The assessee was a Joint Managing Director of the Textile Corporation (Private) Ltd. along with one P. D.

Asher. The assessee sold on December 21, 1954 his entire holding F in two companies to Asher and some of his relations. These sales resulted in a profit of Rs. 72,515/- and Rs. 3,14,100/- respectively.

The Income tax Officer assessed these amounts to tax for the assesment year 1956-57 under s. 10(5A) of the Act as compensation earned for parting with the effective power of management.

The assessment was upheld by the Appellate Assistant Commis- G sioner. The assessee appealed to the Appellate Tribunal.

After some adjournments the appeal was finally fixed for hearing on Augu,:·. 26, 1958.

On that date no one was present on behalf of the assessee nor was there any application for an adjournment.

On August 28, 1958 the Tribunal dismissed the appeal for default of appearance. This the Tribunal purported to do under Rule 24 H of the Appellate Tribunal Rules, 1946 as amended by notification dated January 26, 1948.

Five weeks after the disposal of the appeal the assessee filed a petition before the Appellate Tribunal praying for its restoration. It was stated, inter alia, in that petition L 11 Sup Cl/69-3

that it was owing to some misapprehension on the part of the assessee's auditors at Coimbatore that the date of the hearing of the appeal was not intimated to the counsel at Madras who was convalescing there after a surgical operation. The Tribunal did not consider that there was sufficient cause for restoration and rejected the petition. The assessee applied for a reference under s. 66( 1) of the Act on two questions of law but that application was rejected by the Tribunal. The assessee approached the High Court under s. 66(2) of the Act and on April}, 1960 the High Court directed the Tribunal to state the case on two questions.

The matter was first heard by a division bench but owing 10 the validity of Rule 24 having been canvasse~ a special bench consist ing of the Chief Justice arid two judges was constituted.

The special bench reframed the first question thus :

"Whether rule 24 of the Appellate Tribunal Rules, 1946 in so far as it enables the tribunal to dismiss an appeal for default of appearance, is ultra vires."

The second question was

"Whether on the facts and in the circumstances of the case the two sums of Rs. 72,515 and Rs. 3,14,100 were assessable to tax under s. 10(5A) of the Income tax Act?"

Rule 24 was framed under sub-s. (8) of s. 5A of the Act. This provision confers power on the Appellate Tribunal to frame Rules regulating its own procedure. Section 5A (8) reads :

"Subject to the provisions of this Act, the appellate tribunal shall have power to regulate its own procedure and the procedure of Benches of the Tribunal in all matters arising out of the discharge of its functions, including the places at which the Benches shall hold their sittings."

The Appellate Tribunal first made certain Rules which were published by means of anotification dated Feburary 1, 1941. Rule 36 provided that the Tribunal shall determine the appeal on merits notwithstanding the fact that the appellant did not choose to appear.

The Tribunal was also empowered to restore an appeal which had been disposed of Without hearing the appellant.

The Rules made in 1941 were substituted by the Appellate Tribunal Rules, 1946 which were promulgated by means of Income tax Appellate Tribunal Notification, dated October 31, 1946. Rule 24 was in the followfug tenns :

"Where on the day fixed for hearing or any other day to which the hearing may be adjourned, the appel-

C.I.T. V. CHBNNIAPPA (Grover,/.}

lant does not appear when the appeal is called on for hearing, the Tribunal may, in its discretion, either dismiss the appeal for default or may hear it ex parte ."

This Rule was amended by means of a notification dated January 26, 1948 and it took the following shape :

B "Where on the day fixed for hearing or any other day to which the hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the tribunal may dismiss the appeal for default."

The Rule contained no provision for restoring an appeal dismissed

 C for default.

The Special Bench o~ the High Court noticed the previous history of Rule 24 as also the terms in which it came to be framed after the passing of the Income tax Act, 1961 which enables the Tribunal, in its discretion, either to dismiss the appeal for default D or to hear it ex parte in case of non-appearance of the parties and further enables the Tribunal to set aside the dismissal on sufficient cause being shown for non-appearance.

After referring to various decided cases and examining the relevant provisions of the Act, the Special Bench sun'Uned up the position thus :

"To sum up the position, the Appellate Tribunal is the appointed machinery under the Act for finally deciding questions of fact in relation to assessment of incometax. Its composition, consisting as it does of qualified persons in law and accountancy, makes it peculiarly qualified to deal with all questions raised . in a case, whether there be a5sistance from the party or his counsel or riot. Section 33 ( 4) obliges it to decide an appeal, after giving an opportunity to the parties to put forward their case. The giving of the opportunity only emphasises the character of the quasi-judicial function pet, formed by the Appellate Tribunal. The fact that that opportunity is not ayailed of in a particular case, will not entitle the Tribunal not to decide the case. There can be no decision 'of the case on its merits if the matter is to be disposed of for default of appearance of the parties. Further, an adjudication on the merits of the case is essential to enable the High Coun to pedorm its statutory duty and for the Supreme Coun to hear lllll appeal filed under section 66-A. Section 33 ( 4) itself indicate& by the use of the word ''thereon" that the. decision . should relate to the subject matter of the appeal Rule 24, therefore, to be consistent with s. 33 ( 4) could only empower the Tribunal to dispose of the appeal on

its merits, whether there. be an appearance of the party before it or not. This was iDdeed the rule when it was first promulgated in the year 1941. The rule in its present form, as amended in the year 1948, in so far as it enables the dismissal of an appeal before the Income tax Appellate Tribunal for default of appearance of the appellant, will, therefore, be ultra vires, as being in conflict with the provisions of Section 33 ( 4) of the Act."

On behalf of the appellant it was urged that the powers of the Appellate Tribunal relating to an appeal are derived from s. 33 ( 4) as also from s. 5A ( 8) and the Rules made thereunder and when Rule 24 cannot be said to be ultra vires the latter provision it cannot be impugned as being repugnant to s. 33 ( 4).

Ther~ is nothing, either express or implied, in the language of s. 33 ( 4) from which it could be held that the order of the Tribunal in an appeal must always be made on the merits. The decisions of the Allahabad, Madras and Punjab High Courts in Shri Bhawan Radha Kishen v. Commissioner of Income tax, U.P.,(') Ruvula Subba Rao & Ors. v. Commissioner of Income tax, Madras( 2) and Mangat Ram Kuthiala & Ors. v. Commissioner of Income tax, Punjab(') have also been pressed in support of the appellant'•

contention.

Now s. 5A of the Ac~ appears in Chapter 2A relating to the Appellate Tribunal. Sub-ss. (I) to ( 4) provide for the constitution of the Tribunal and the appointment of its President and Members.

Sub-sections (5) to (7) provide for the manner iii which the benches of the Tribunal have to function. Sub-section ( 8) is to this effect :

"Subject to the provisions of this Act the Appellate Tribunal shall have the , power to regulate its own procedure and the procedure of benches of the Tribunal in all matters arising out of the discharge of its functions including the places at which the bench shall hold their sittings." The powers, functions and duties of the Appellate Tribunal are "'t out in ss. 28, 33, 35, 37, .48 and 66. For our purpose reference may be made only to ss. 33 and 66. Sub-sections (I) nd

(2) of s. 33 give a right to the assessee and the Commissioner to a; ipcal to lhc Appellate Tribunal against the order passed by ihe Appellate Assistant Commissioner within sixty days of the communication of his order. Under sub. s. (2A) the Tribunal can admit an appeal after the expiry of sixty days if it is satisfied that there was sufficient cause for not presenting it within that period.

Sub-section (3) lays down the formalities in the matter of the filing of an appeal. Sub-s. ( 4) is to the effect that the Appellate

(I) 22 J.T.R. 104.

(3) 38 I.T.R. 1.

(2) 27 I.T.R. 164.

Tribunal may, after giving toth parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit and shall communicate any such. orders to the assesse.: and to the Commissioner. Sub-s. ( 5) deals with the changes to be made in the assessment as a result of the orders of the Appellate Tribunal.

Sub-section ( 6) makes the orders of the Tribunal on appeal final, the only saving being with reference to the provisions of s. 66.

Under that section the assessee or the Commissioner can require the Appellate Tribunal to refer to the High Court any question of law arising out of the order of the Appellate Tribunal and if the Tribunal refuses to state the case on the ground that no question of law arises the assessee or the Commissioner can, within the prescribed period, apply to the High Court and the High Court can direct the Appellate Tribunal to state the case and make a reference. It is unnecessary to refer to all the previsions of s. 66 except to notice the power of the High Court to decide the question of law which decision has to be implemented by the Appellate Tribunal.

Now Rule 24 cannot be said to be ultra vires sub-s. ( 8) of s. 5A but what has to be essentially seen is whether it is repugnant to the provisions of s. 3 3 ( 4). The reasoning which prevailed with the Special Bench of the High Court, in the present case, was that under s. 33 ( 4) the Tribunal is bound to dispose of the appeal on the merits, no matter whether the appellant is absent or not.

Reference in particular was made to the remedies, namely, the provisions contained in s. 66 relating to reference on question of law and the further right of appeal to this Court under s. 66A if the case is certified to be fit one for appeal. The Special Bench found it difficult to accept that by exercising the power to dismiss an appeal for default of appearance under Rule 24, these remedies which were open to an aggrieved party could be defeated or rendered infructuous. The fact that there was no provision in Rule 24 or any other Rule for restoring an appeal once it was dismissed for default was also considered weighty in the matter. The cases

i':l which the valiity of Rule 24 has been upheld may now be considered.

In Shn Bhagwan Radha Kishen v. Commissioner of Income ax, U.P. ('.) the discussion on lhe question of validity of the rule ts somewhat meagre. It was no doubt said that Rule 24 did not in any way come into conflict with s. 33 ( 4) but hardly any reasons were given in respect of that view. It was recognised that there w:is o specific rule empowering the Tribunal to restore an appeal d1snussed for default of appearance but it was observed that the Tribunal would have inherent jurisdiction to set aside such an order if satisfied with regard to the tlxistence of a sufficient cause. According to Ravula Subba Rao & Ors. v. Commissioner of Income tax, Madras(') a very wide power was given to

(I) 22 l.T.R. 104.

(2) 27 1.T.R. IM.

the Appellate Tribunal by s. 33 ( 4) a11d it could pass any order which the circumstances of the case ·" quired. It was immaterial whether the opportunity of being heard had been availed of by the party ..ir not.

This provision, it was held, did not make it obligatory for the Appellate Tribunal to dispose of the appeal on merits. In this case again there was 1,, udly much discussion and the Ail aha bad decision was simply fo !lowed.

In Mangat Ram Kuthiala &. Ors. v. Commissioner of Income tax, Punjab('), the points raised were different and arose in a petition filed under Arts. 226 and 227 of the Constitution. It does not appear that the validity of Rule 24 was canvassed.

The scheme of the provisions of the Act relating to the Appellate Tribunal apparently is that it has to dispose of an appeal by making such orders as it thinks fit on the merits. It follows from the language of s. 33 ( 4) and in particular the use of the word "thereon" that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant.

This can only be done by giving a, decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned has failed to appear. As observed in H ukumchand Mills Lid. v.

Commissioner of Income tax, Central [Jombay(') the word "thereon" in s. 33 ( 4) restricts the jurisdiction of the Tribunal to the subject matter of the appeal and the words "pass .such orders as the Tribunal thinks fit" include all the powers (except possibly the power of enhancement) which are conferred upon th.e Appellate Assistant Commissioner by s. 31 of the Act. The provisions contained in s. 66 about making a reference on question of law to the High Court will be rendered nugatory if any such power is attributed to the Appellate Tribunal by which it can dismiss an appeal, which has otherwise been properly filed, for default without making any order thereon in acor dance with s. 33 ( 4). The position becomes quite simple when it is remembered that the assessee or the Commissioner of Income tax, if aggrieved by the orders of the Appellate Tribunal, can have resort only to the provisions of s. 66.

So far as the questions of fact are concerned the decision of the Tribunal is final and reference can be sought to the High Court only on questions of Jaw.

The High Court execcises purely advisory jurisdiction and'has no appellate or revisional powers.

The advisory jurisdiction can be exercised on a proper reference being made and that cannot be done unless the Tribunal itself has passed proper order under s. 33(4). It follows from all this that the Appellate Tribunal is bound to give a proper decision on questions of fact as well as law which can only be done if the appeal is disposed of on the merits

(1) J81.T.R. 1.

(2) 6'.\ 1.T.R. :!32.

and not dismissed owing to the absence of the appellant. It was laid down as far back as the year 195 3 by S. R. Das, J. (as he then was) in Commissioner of Income tax, Madras v. Mtt. Ar. S.

Ar. Arunachalam Chettiar(') that the jurisdiction of the Tribunal and of the High Court is conditional on there being an order by the Appellate Tribunal which may be said to be one under s. 33 ( 4) and a question of law arising out of such an order. The Special Bench, in the present case, while examining this aspect quite appositely referred to the observations of Venkatarama Aiyar, J. in Commissioner of Income tax, Bombay v. Scindia Steam Navigation Co. Ltd. (2 ) indicating the necessity of the disposal oi

the appeal on .the merits by the Appellate Tribunal. This is how the learned judge had put the matter in the form of interrogation :

"How can it be said that the Tribunal should seek for advice on a question which it was not called upon to consider and in respect of which it had no opportunity of deciding whether the decision of the Court should be sought. ?"

Thus looking at the substantive provisions of the Act there is no escape from the conclusion that under s. 33 ( 4) the Appellate Tribunal has to dispose of the appeal on the merits And cannot short circuit the same by dismissing it for default o.f appearance.

Now although Rule 24 provides for dismissal of an appeal for the failure of appellant to appear, the Rules at the material time did not contain any provision for restoration of the appeal. Owing to this difficulty some of the High Courts had tried to find an inherent power in the Tribunal to set aside the order of dismissal Ivide Shri Bhagwan Ratfha Kishen v. Commissioner of Income

tax, U.P.(8 ) and Mangat Ram Kuthia/a & Ors. v. Commissioner of Income tax, Punjab(')]. There is a conflict of opinion among the High Courts whether there is any inherent power to restore an appeal dismissed for default under the Civil Procedure Code. (Mulla, Civil Procedure Code. Vol. IT, pp. 1583, 1584). It is unnecessary to resolve that conflict in the present case. It is true that the Tribunal's powers in dealing with appeals are of the widest amplitude and have, in some cases, been held similar to and identical with the power of an appellate court under the Civil Procedure , Code .. Assuming that for the aforesaid reasons the Appellate Tnbunal 1s competent to set aside an order dismissing an apoeal for default in exercise of its inherent power there are serious difficulties in upholding the validity of Rule 24. It clearly comes into conflict with sub.-s. ( 4) of s. 33 and in the event of repuanancy between the substantive provisions of the Act and a rule it is

(I) 2J J.T.R. 180.

(2) 42 l.T.R. 589.

(3) 22 I.T.R. 104.

(4) 38 I.T.R. 1.

the rule which must give way to the provisions of the Act. We would accordingly affirm the decision of the Special Bench of the High Court and hold that the answer to the question which was referred was rightly given in the affirmative.

The appeal fails and it is dismissed with costs.

R.K.P.S.

Appeal dismissed.

COMMISSIONER OF INCOME TAX, MADRAS

S. CHENNIAPPA MUDALIAR, MADURAI

February 24, 1969

C. SHAH

A. N. GROVER, JJ.

Income Tax Act 1922

section 33(4)

Appellate Tribunal Rules

section 33(4)

Appellate Tribunal Rules, 1946

Appellate Tribunal Rules, 1946

section 3

s. 33

s. 33(4)

s. 33(4)

section 33(4)

D. Narsaraju

R.H. Dhebar

R. N. Sachthey

B. D. Sharma

R. Gopalkrishnan

R. Ba

Grover

Appellate Tribunal Rules, 1946

s. 33

Income tax Act, 1922

Asher Textiles Ltd.

Textile Corporation (Private) Ltd.

P. D.

Asher

December 21, 1954

Asher

s. 10(5A)

Augu,:·. 26, 1958

August 28, 1958

Appellate Tribunal Rules, 1946

January 26, 1948

Coimbatore

Madras

s. 66( 1)

s. 66(2)

Appellate Tribunal Rules, 1946

s. 10(5A)

s. 5A

Section 5A

Appellate Tribunal Rules, 1946

October 31, 1946

Income tax Act, 1961

Section 33

Supreme Coun

section 66

Section 33

s. 33

Section 33

s. 33

s. 5A

s. 33

s. 33

s. 5A

ss. 28, 33, 35, 37

ss. 33 and 66

s. 33

s. 66

s. 66

s. 5A

s. 3

s. 33

s. 66

s. 66A

s. 33

s. 33

Arts. 226 and 227

s. 33

s. 33

s. 31

s. 66

s. 33

s. 66

s. 33(4)

S. R. Das

s. 33

Venkatarama Aiyar

s. 33

Civil Procedure Code

s. 33