Law:

Section:

Section 3 of the Indian Income-tax Act, 1922 [corresponding to section 4 of the Income-tax Act, 1961] - Capital or revenue receipt - Assessee along with five brothers constituted a partnership which ran a sugar mill - On a suit for dissolution of partnership by one of the brothers, under an arrangement, two brothers leased their shares in factory to assessee at a certain sum - Later, they cancelled the lease and paid certain sum to assessee - Whether amounts so received by assessee on cancellation of lease by his brothers was a revenue receipt - Held, yes Section 10(2)(vi) of the, Indian Income-tax Act, 1922 [corresponding to section 32(1) of the Income-tax Act, 1961] - Depreciation - Allowance rate of - Whether benefit of section 10(2) (vi) would be admissible where assessee is fractional owner of an asset - Held, no Section 24 of the Indian Income-tax Act, 1922 [corresponding to section 72 of the Income-tax Act, 1961] - Loss - Carry forward and set off of - Assessee and his brothers constituted a partnership running a sugar mill - Following a suit for dissolution of partnership by one of the brothers the sugar mill was put under a receiver -Whether assessee in whose favour three other brothers had transferred their interest in sugar mill could claim set off of unabsorbed carried forward loss against rent received from receiver - Held, on facts, no Facts The assessee with his five brothers constituted a partnership which ran a sugar factory. In 1944, one of the brothers S instituted a suit for the dissolution of partnership. The properties were put in charge of a receiver appointed by the Court. So far as the sugar factory was concerned, the arrangement was that at five yearly rest an auction was to be held confined to the partners and the highest bidder would be given lease to operate the factory for that period under the receiver. Thereupon S, one of the brothers, transferred his one-sixth share in the factory to the assessee at a consideration. The two other brothers D and K leased out their one-sixth shares to the assessee. Later, the lease was cancelled by D and K under a compromise and they agreed to pay certain sums to the assessee. Though the assessee…

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