Law: Income Tax Act, 1922

Section:

(a) Income-tax-- ----Reference---Unless a question of law arises out of the order of the Tribunal, High Court has no power to decide the same. (b) Income-tax--- ----Reference---Question of law---Whether a question of law formulated arises out of the order of the Tribunal itself and calls for decision of the High Court is to be seen by the High Court---If the High Court finds that the questions as formulated arise out of the order of the Tribunal and are questions of law and call for decision, reference is competent. (c) Income-tax--- ----Double taxation ---Assessee, a limited company and subsidiary of a Government Corporation carrying on business of marketing petroleum products of the said Government Corporation---Assessing Officer treating the amount representing the price differential surplus resulting from refixation of the price of petroleum products by the Government as would fall profit of the assessee-company and made addition of the said amount to the total income of assessee---Validity---Government Corporation through notification directed that such surplus was normal income of the assessee--Transfer of the amount thus was by way of diversion of income of the assessee under overriding title--¬Amount in question having been earned by assessee due to rectification of price of the stock and the stock belonged to assessee, the profit, assessee earned was its profit and was taxable in the hands of assessee---Merely because the amount was to be paid to the Corporation on the direction of the Government the nature of, the expenditure would not change and did not assume the character of revenue expenditure---Profit in question being income of the assessee and on subsequent payment of the same to the Corporation it entered upon a different passage and the Corporation being a separate anti distinct entity unit of assessment from the assessee contention on double taxation by the assessee was repelled. Where under the obligation the income is-diverted to before it reaches the hand of the assessee it is a revenue expenditure and merits deduction. But where the income is applied to discharge the obligation of the assessee after it reaches the assessee it is a…

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