Law:

Section:

Section 4 of the income-tax act, 1961, read with article 289 of the Constitution of India-Income-Chargeable as-Whether exemption under article 289(1) is available only to a state and not to an instrumentality of state-Held, yes-Memorandum of association and articles of association of assessee-company, a state government undertaking, provided, inter alia, that no part of funds of company would be employed in purchase or in loans upon security of company's share and all income of company would belong to price equalisation/stabilisation fund of state government and that total capital of company was to be contributed by state government and company would be wholly owned by state government-Whether income of assessee-company could be treated as income of state and hence exempt from union taxation under article 289(1)-Held, no Facts The memorandum of association of the assessee-company, which was a State Government undertaking, provided, inter alia, that the main objects of the company were to engage in, promote, improve, develop, counsel and finance production, purchase, storage, processing, movement, transport, distribution and sale of foodgrains, food-stuffs and any other essential commodities and to establish laboratories for the purpose of ensuring quality control, to train personnel in the technique of quality control, and to provide services and assistance of all kinds of the said purchases, including capital credit, means, resources, technical and managerial services, advice and assistance. The articles of association of the company provided, inter alia, (i) that no part of the funds of the company would be employed in the purchase of or in loans upon the security of the company's shares and all income of the company would belong to the Price Equalisation/Stabilisation Fund of the State Government and (ii) that the total capital of the company was to be contributed by the State Government, and the company would be wholly owned by the State Government. The assessee claimed its income to be exempted from Union taxation under article 289(1) of the Constitution on the ground that it was an instrumentality of the State. The revenue authorities disallowed 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