Law: Income Tax Act, 1922

Section: 66(1),24,24(1)

Law: Income Tax Act, 1922

Section: 66(1),24,24(1)

(I) Section 4 of the Income-tax Act, 1961 [Corresponding to section 3 of the Indian Income-tax Act, 1922] - Income - Chargeable as - Assessment years 1949-50 and 1950-51 - Whether where assessees-company, carrying on coal mining business, obtained a licence of colliery and after prospecting for coal, sold it on profit, amount of profit was assessable as income in hands of assessee - Held, yes (II) Section 71 of the Income-tax Act, 1961 [Corresponding to section 24 of the Indian Income-tax Act, 1922] - Losses - Set off of from one head against income from other - Assessment year 1950-51 - Assessee-company sold its factory in October 1948 but price was finally settled in December, 1949 - In settlement assessee suffered loss - Whether until price was settled, loss did not accrue or arise to company and thus loss was suffered in account year 1949-50 and could be allowed to be set off against income of that year under section 24(1) of 1922 Act - Held, yes FACTS (I) The appellant-company carried on business as managing agents, dealers in share and stocks, stores and spare parts of machinery and acts as insurance agents and manufacturers of carbon dioxide. It also worked certain coal mines. The company obtained a prospecting licence from the State for the colliery and after prospecting for coal sold the colliery, and thereby earned a profit. The ITO brought the profits arising out of the sale of the colliery to tax as business profits. The order was confirmed in appeal by the AAC and the Tribunal. On reference, the High Court held that the sale of colliery was a part of the trading activities of the assessee and such activity could not gathered from the surrounding circumstances 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 obtaining a reasonably higher price at the sale and thus, the profits that acquired could not be treated as a capital asset. On appeal to the Supreme Court: FACTS (II) The assessee had an ice-factory which was sold in 1948 but the price was finally settled in December, 1949. In the settlement, the company suffered a loss. The Tribunal disallowed the loss in the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492