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TMI Blog1946 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... es which the assessees, in due course, would publish. What has happened in the present case is that two gentlemen named Gopi Lal Mathur and Anand Narain Mathur were the authors of a school book entitled the Hindustani Reader. This book was published by the assessees and it appears that the Education Department of the United Provinces Government prescribed the book as a text-book for use in the provincial schools. This was in or about the year 1937. For these reasons in the course of the next three years, the sales of the book were substantial and it was claimed by the authors that they were entitled to three years' royalties amounting in all to approximately thirteen thousand rupees. This was disputed by the assessees and in 1941 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the copyright of the book in question. The line, therefore, that the Department took was that the nine thousand and five hundred rupees was nothing more nor less than the consideration which was paid by the assessees for the out and out purchase of the copyright of the book, thereby, of course, putting an end to ail question of royalties. At that point, we turn to the findings of the Income-tax Tribunal. These are contained in para. 5 of its judgment dated September 27, 1943. They point out that this point as to the nine thousand and five hundred rupees being merely a commutation of royalties was never taken until the case reached the Income-tax Tribunal, it having been, if not conceded, at least never denied at any earlier stage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the character of the business which the purchaser is carrying on We have been, fortunate to notice that in one of the most recent cases decided in the Privy Council, this very question has been discussed: British South Africa Company v. Commissioner of Income-tax [1946] AC 62; ITR suppl. 17. That was a case concerning the British South Africa Company, which acquired valuable mining rights. The question was whether its acquisition of those mining rights was a capital transaction or whether it was an item of its current business so as to give rise on re-sale to a profit or gain as the case might be. It is worth referring to what the then Lord Chancellor, Viscount Simon, said in this connection. He said:- The principles applicable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if they had been acquiring a patent or a piece of machinery to make shoes or any other of the paraphernalia required to produce that which it was their business to deal in. In our judgment, there can be no doubt but that the Tribunal was perfectly right in this case. There is one other short point which concerns an allowance for the destruction of stock-in-trade by the alleged ravages of white ants. The assessees claimed a sum of eighteen thousand rupees odd on this account. Nothing was originally allowed by the Income-tax Officer. But on appeal to the Assistant Commissioner, five thousand rupees was allowed and this was subsequently increased to ₹ 9,415 by the Appellate Tribunal. In the result, exactly half of what was origina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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