K T M T M ABDUL KAYOOM Vs. COMMISSIONER OF INCOME TAX MADRAS

JUDGEMENT

(1.) I had taken a view different from that of my learned brethren when this appeal was heard along with Pingle Industries Ltd., Secunderabad v. Commissioner of Income-tax, Hyderabad 1960-3 SCR 681 : (AIR 1960 SC 1034), and that view was expressed in a very short judgment dated April 26, 1960.

(2.) Now, we have had the advantage of hearing a very full argument with regard to the facts of this appeal, and I for myself have had the further advantage and privilege of reading the judgment which my learned brother Hidayatullah, J. is proposing to deliver in this appeal. I have very carefully considered the question again with reference to the facts relating thereto and, much to my regret, have come to the conclusion that I must adhere to the opinion which I expressed earlier. My view is that the facts of this case are indistinguishable from the facts on which the decision of the Privy Council in Mohanlal Hargovind v. Commissioner of Income-tax, C. P. and Berar, 1949-17 ITR 473 : (AIR 1949 PC 311) was rendered, and on the principles laid down by this Court in Assam Bengal Cement Co. Ltd. v. The Commissioner of Income-tax, West Bengal 1955-1 SCR 972 : ( (S) AIR 1955 SC 89), it must be held that the expenditure of Rs. 6,111/- in this case was on revenue account and the respondent firm was entitled to the allowance which it claimed.

(3.) The short facts are these. The respondent firm carried on a business in the purchase and sale of conch shells (called chanks). It used to acquire the stock of conch shells by (1) purchase from divers, (2) by purchase from the Fisheries Department of the Government of Madras, and (3) by fishing for and gathering such shells from the sea. It disposed of the stock so acquired at Calcutta, the difference between the cost price and selling price less expenses being its profit made in business. On November 9, 1945, it took on lease from the Director of Industries and Commerce, Madras, the exclusive right, liberty and authority to fish for, take and carry away all "chank" shells in the sea off the coast line of the South Arcot District including the French Kuppams of Pondicherry. The boundary of the area within which the right could be exercised was given in a schedule to the lease. The lease was for a period of three years from July 1, 1944, to June 30, 1947, on a consideration of an yearly rent of Rs. 6,111/- to be paid in advance. Clause 3 of the lease contained the material terms thereof and may be set out in full.