9911796707
TMI Blog1928 (1) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... r. This application was made under the provisions of section 66(2) of the Income-tax Act aforesaid. The Commissioner, however, in an order dated the 19th of March 1927 rejected the application. He took the view that the six question of law put forward by the applicant did not arise, as in his opinion the six questions were not questions of law, but were questions of fact. It is with the object of making the Commissioner alter his opinion, in this respect that the present application to obtain a rule is presented. Section 66(2) of the Indian Income-tax Act is in these terms:- "Within one month of the passing of an order under section 31 or section 32, the assesse in respect of whom the order was passed may, by application accompanied by a fee of one hundred rupees or such lesser sum as may be prescribed, require the Commissioner to refer to the High Court any question of law arising out of such order, and the Commissioner, snail, within one month of the receipt of such application, draw up a statement of the case and refer it with his own opinion thereon to the High Court." Section 66(3) runs as follows:- "If, on any application being made under sub-section (2), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights of appeal contained in Revenue Legislation be strictly construed as to their exact meaning as far as they allow specific time in which an effective appeal can be put forward. It can easily be seen that a glut of work in the Office of a busy Commissioner might completely deprive an assesse of his right to appeal at all. Such a state of affairs would not be carrying out the intention of the statute, and in this case, therefore, although I think that no conduct of the assesse himself could have enlarged to his advantage the statutory period under the section, neither can any conduct of the executive diminish the full period of time allowed to reflect upon and decide whether action should be taken by way of approach to this Court. There is a still further contention, however, on the part of the Crown which remains to be discussed. The contention is this: that the consideration by the Commissioner of the points of law put up by the applicant was not done at the instance of the applicant at all, but was carried out suo motu: under the provisions of section 33 of the Act. It is not difficult to see why this attitude is now adopted, because if action was indeed taken under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hought that the amount allowed for current repairs as opposed to capital expenditure was fair and reasonable. He thought that the material by way of accounts which was afforded by the assesse to the Department was slender and unsatisfactory and could give no proper guide to a division between the two forms of capital and current payments. He was of the opinion that the assesse could, if he chose to do so, produce vouchers and pay rolls to support the accounts put forward and to explain them without any ambiguity. When the matter was considered by the Commissioner he took the same view as his two assistants, but perhaps a little more strongly. He was of the opinion that there was a deliberate attempt on the part of the assesse to conceal the nature of the expenditure on his fleet. He found that the expenses for repairs to the shipping, for example, were deliberately included in the accounts of a saw mill owned by the assesse . The Commissioner sets forth in his order that the history of the dealing between the Department and the assesse in the past has been far from satisfactory. The Commissioner said that prior to the assessment of 1921-22, although accounts were admittedly in exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 1922, when the present Income-tax Act came into force, it is maintainable that before any allowance for depreciation can be made, it is essential that petitioner should supply particulars of the prime cost of his fleet? (d)If the assesse is unable to supply full particulars of the prime cost of his fleet, is he to be debarred from claiming any allowance for depreciation on any other basis whatsoever? (e)Where, as in the case of the petitioner, the business is an inherited one, in what manner is the prime cost of plant, machinery, etc., to be ascertained ? (f)Whether the petitioner is debarred, under the circumstances of the present case, from maintaining and establishing any claim for depreciation? Sub-sections (1) and (2) of section 10 of the Indian Income-tax Act run as follows:- "(1) The tax shall be payable by an assesse under the head 'Business' in respect of the profits or gains of any business carried on by him. (2) Such profits or gains shall be computed after making the following allowances:" Sub-paragraph (V) of section 10 referring to allowance is as follows:- "(V) In respect of current repairs to such buildings, machinery, plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in many cases the question whether the money was wholly or exclusively laid out or expended for the purposes of trade must depend upon a knowledge of the facts of the trade, of the way in which it is carried on, and of the effect of payments made in that trade, all of which are questions of fact: This interpretation was shared by the House of Lords in deciding a very similar question. In a judgment delivered by Lord Sumner in the case of Usher's Wiltshire Brewery v. Bruce 6 Tax Cas. 399; (1915) A.C. 433 where a finding of the Court of Appeal delivered by Sir Samuel Evans, in which he stated that "when the various circumstances and facts upon which the question depends are established and found, the proper inference in order to determine whether payments were wholly and exclusively laid out for the purposes of the trade or concern within the meaning of the provisions referred to. is a question of law", was reversed, Lord Sumner said that the judgment appealed against really found facts and did not, as Sir Samuel Evans thought it did, rule the law when it declared that the rents foregone were losses of an annual value and not expenses of the trade. Lord Sumner ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary life of this particular type of wooden cargo boat and of the standard of cost an owner such as the present applicant might be likely to adopt in keeping his vessels in serviceable condition. A decision on questions of fact, however, must always be considered by an Appellate Court from the point of view whether although, the decision is indubitably one of fact, there was sufficient evidence to come to proper conclusion. If a decision of fact is founded upon insufficient evidence a question of law is produced which may be considered by any Court of Appeal. In this particular case there may have been imperfect material on which to found a conclusion, but such lack of evidence and insufficient material was, in my opinion due to the neglect of the assesse and therefore its insufficiency cannot be used to throw over the question of fact a cloak of law. No one can take advantage of his own negligence, otherwise a wilful non-compliance with the Act might place an assesse , temporarily at any rate, in a most advantageous position. I, therefore think that the whole question of the expenditure upon these cargo vessels is a question of fact to be determined by the Income-tax Officials alon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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