Law: Income Tax Act, 1922

Section: 15,15BB,4,10

(a) Income-tax Act (XI of 1922)--Ss. 15 BB & 4 Assesses, a private, limited company carrying on business of manufacturing and granted tax holiday as an industrial concern Company also undertook and executed works contract -Assessee company assigned contracts to another party on commission ¬Claim of assesses that commission so derived by assessee could not be assessed because of S. 15 BB or being receipt of a capital nature--¬Such claim negatived by Tribunal on ground that commission was riot exempted and not of capital nature holding that commission would continue to be liable to tax in hands of assesses Held, conclusion arrived at by tribunal was proper Benefit of S. 15 BB was confined only to profit from industrial undertaking and did not extend to profits of any other business activity even though closely connected with industrial undertaking. (b) Income tax Act (XI of 1922) - S. 15 BB Tax holiday granted to assesses as industrial under¬taking of construction Construction by assessee and assigned to other party on commission Commission Receipt or income which was foreseen, known, anticipated and provided by an agreement, from activity other than industrial activity, could not be regarded as casual income Such income not of a capital nature Assesses was not entitled to exemption on such income (commission). (c) Income-tax Act (XI of 1922)-- S. 10 Assesses a contractor assigned a contract to another party On commission Amount of designing fee accrued to assessee, without being any stock in trade and assesses received such amount from sub contractor Assesses received said amount on account of a transaction with respect to execution of work, thus there being no capital element in transaction Profit of such fee, therefore, be on revenue account Assesses had been carrying on work of contractors and that it had dealt with its sub contractor as trading asset by using them to earn income, commission and fees from sub contractor, and therefore, receipts by way of commission anti fees were trading receipts and profits therefrom Were business income and receipts in question were includable in total amount of assessee's business income Tribunal was therefore,…

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