CROWN FLOUR MILLS DELHI Vs. STATE OF PUNJAB
LAWS(P&H)-1954-11-12
HIGH COURT OF PUNJAB AND HARYANA
Decided on November 08,1954

CROWN FLOUR MILLS DELHI Appellant
VERSUS
STATE OF PUNJAB Respondents

JUDGEMENT

Bhandari, C.J. - (1.) This reference under Sub-section (1) of Section 66, Income-tax Act, raises a point which is as novel as it is new.
(2.) The assessee firm purchased the Crown Flour Mills for Rs. 7,21,000/- in the year 1945 and sold it for the same amount in the year 1950. During the period of five years in which the mill was used for the purpose of the assessee's business, depriciation was allowed on the building, plant and machinery to the extent of Rs. 1,26,098/. The Income-tax authorities included this sum of Rs.1,26,098/- in the income profits and gains of the assessee firm in the assessment for 1951-52 under the second proviso to Section 10(2) (vii) of the Income-tax Act.
(3.) Two questions were agitated before the Tribunal in appeal, one concerning the taxable quantum and the other concerning the validity of the proviso under which the assessment was made. The Tribunal found in favour of the assessee in regard to the quantum of the addition and reduced the addition to a sum of Rs. 86,854/-. They were unable to hold, however, that the impugned proviso was invalid or inoperative in the eye of law.;


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