- (1.) REFERENCE made by the Commissioner of Income Tax, Bengal under Section 66(2) of the Indian Tax Act, XI of 1922 STATEMENT OF CASE. 'Messrs. McLeod and Co., Managing Agents of the five Light Railway Companies set out below have asked me to state a case under Section 66(2) of the Income Tax Act in respect of the assessments for the year 1933 -34 on the income of those Railways. The Railways in question are : - 1. The Ahmadpur Katwa Railway Co., Ltd. 2. The Katakhal Lalabazar Railway Co., Ltd. 3. The Bankura Damodar River Railway Co., Ltd. 4. The Kalighat Falta Railway Co., Ltd. 5. The Burdwan - Kutwa Railway Co., Ltd. The appeal in all 5 cases was heard simultaneously and one joint order was passed and in view of the fact that the assessments in question fall in two categories, I propose to state a case under that section and sub -section only in respect of two Railway Companies, viz., The Ahmadpur Katwa Railway Co., Ltd., and the Katakhal Lalabazar Railway Co., Ltd., one of which falls in each category and to determine the question at issue in the other cases in accordance with the decision of Their Lordships in these two cases.
(2.) BELOW is a table setting out under head E, the total income assessed in each of the cases, while B, C and D show how that total income has been computed. JUDGEMENT_1_LAWS(CAL)4_1935.htm
(3.) IN each of the two assessments in respect of which I am stating a case either the whole or a part of the subsidy received by the Company from the Secretary of State for India has been assessed. In the first case, the Companies accounts disclosed profits exclusive of the Government subsidy and the total income assessed in this case is the aggregate of such profit and of the State subsidy, while in the second case, where the accounts disclosed a deficit, the income assessed by the Income Tax Officer is the difference between the State subsidy and the deficit thus disclosed. In the first case, the assessees contention is that both the profits disclosed in the accounts and the State subsidy should have been exempted from taxation in the hands of the company and in the second case his argument is that the balance of the subsidy left over after deducting therefrom the working deficit should be so exempted. In both cases he argues that the State subsidy is not taxable in the hands of the company and in the first case he also contends that even the trading profits earned by the company apart from the State subsidy are not taxable.;