9911796707
TMI Blog1958 (5) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income Tax Officer treated the excess as the assessee's income for the account year in which it was received, and the order of the Income Tax Officer was upheld by the Tribunal in appeal. At the request of the assessee, the Tribunal has referred the following question of law to this Court for decision, Whether, on the facts and in the circumstances of this case, the amount in excess of the cost price of the land (which was the assessee's stock-in-trade) received by him from Government for its compulsory acquisition under the Acquisition Act was revenue receipt of the relevant year of account ? 3. Mr. A. N. Kirpal who appears for the assessee admits that the compensation paid to his client by Government exceeded the total of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaint, is actually sold or its scrap value. A Division Bench of the Calcutta High Court, however, came to a contrary conclusion. It held that the transaction by which Government acquired the plant could not be regarded as a 'sale' within the meaning of Section 10(2)(vii) for the ordinary conception of sale is that something is handed over for ft price as a result of negotiations and agreement. It held further that the amount paid by Government on account of the price was not taxable as profit under the provisions of Section 10(2)(vii). This decision appears to me to be wholly irrelevant to the matter in controversy before us for it endeavours to continue the meaning of the expression sold appearing in Section 10(2)(vii) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lots-from a scheme under which the company had acquired rights to build in the course of trade: Shadbolt H. M. Inspector of Taxes v. Salmon Estate Ltd. 1943 25 Tax Cas 52 and sums paid to terminate a remunerative contract: Kelsall Parsons and Co. v. Commissioner of Inland Revenue 1938 21 Tax Cas 608. In Commissioner of Inland Revenue v. Newcastle Breweries Ltd 1927 12 Tax Cas 927 a question arose whether a sum awarded to a company of brewers and Wine and spirit merchants as compensation for a quantity of rum requisitioned by the Admiralty was a profit arising from its trade or business. The Company contended that it was not. Rowlatt J. whose decision was upheld by the Court of Appeal and the House of Lords held that it was in fact a comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... simply a realisation of a portion of the stock-in-trade at rather an earlier stage of the process than was the case with ordinary sales. 5. In Raghuvanshi Mills Ltd., Bombay v, Commr. of Income Tax, Bombay City [1952]22ITR484(SC) , the assessee company had insured its mills with certain insurance companies and had also taken out certain policies of the type known as 'Consequential Loss Policy, which insured against loss of profits, standing charges and agency commission. The mills were completely destroyed as a result of fire and a certain amount was paid to the assessee by the insurance company. The question arose whether this amount which, was treated as having been paid on account of loss of profit, was assessable to Income Tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
