Law: Income Tax Act (XI of 1922)

Section:

Income-tax Act (XI of 1922)------   ---S. 15-B read with r. 7, Income-tax (Computation of Capital of Industrial Undertakings) Rules, 1948 -Amount comprising `fixed deposits'-Not covered by expression capital employed'-Exemption available only on capital used in undertaking.   A I R 1937 Bom. 493 and Commissioner of Inland Revenue v. The South Bihar Railway Co. Ltd. 12 T C 678 ref.   STATEMENT OF THE CASE   By applications made under section 66(1) of the Act the assessee requires the Tribunal to state certain questions of law which are said to arise out of the Tribunal's order relating to its assessments for the charge years 1950-51, 1951-52 and 1952-53 relevant to the financial years 1949, 1950 and 1951. Since the facts obtaining in all the years are identical, we propose to draw- up a consolidated statement of the ease.   2. The assessee is a public limited company (hereinafter called "the company") which is carrying on business as ship owners. The primary object for which the company is established is to purchase, charter, hire or otherwise acquire steamships or other vessels and to employ the same for tile conveyance of passengers, mails etc. The other objects contained in the Memo randum of Association include the carrying on of the business of ship-builders, the business of acquiring and dealing in shares, stocks or securities in shipping company, air-craft company, or in company carrying on or entitled to carry on business of building or manufacturing steamers, vessels etc. The Memorandum further authorises the company to carry on any other business which may seem to the company capable of being conveniently carried oil in connection with the other objects enumerated earlier or calculated directly or indirectly to enhance the value of or render profitable any of the company's property or rights. During the relevant years the company carried on the business of ship owners and in some of these years it also derived income from joint venture carried on in collaboration with East and West Steamship Company. In connection with the assessments for the relevant years the company claimed exemption envisaged in…