JIYAJEERAO COTTON MILLS LIMITED Vs. COMMISSIONER OF INCOME TAX AND EXCESS PROFITS TAX BOMBAY

JUDGEMENT

(1.) THE following Judgment of the court was delivered by

(2.) THESE two appeals arise out of proceedings taken under S. 34, Income-tax Act 1922, hereinafter referred to as the Act, to bring to tax a sum of Rs. 27,30,094.00 received by the appellant during the account year 1942-1943. The appellant is a public limited Company incorporated in 1921 under the provisions of the Gwalior Companies Act in what was then the independent State of Gwalior, and carries on business in the manufacture and sale of textiles. Its registered office is at Gwalior, and it is a non-resident Company for the purposes of the Act. Its managing agents are Birla Brothers, Ltd., which is a private limited Company registered in British India. The point in dispute in these proceedings is whether sums of money received by the appellant during the account year 1942-1943 and aggregating to Rs. 27,30,094.00 are liable to be taxed under the Act. The appellant admits that it received those monies during that period, and further that they represent profits made by it on certain <PG>271</PG> forward contracts in Jarilla cotton. But it contends that these contracis were entered into at Gwalior with three brokers vis.,. Lashkar Trading. Company, Banwarilal shiv kumar and Meghraj Mundra, that the agreements between the parties specially provide that the goods are to be delivered and prices paid at Gwalior, that, in fact, the sum of Rs. 27,30,094.00 is made up of differences paid in settlement of the contracts at Gwalior that thus the profits accrued and were received wholly at Gwalior, and that, in consequence, they were not liable to be charged under the Act.

(3.) MR. Kolah was highly critical of this evidence. He contended that it ran counter to all the other evidence in the case, and was thoroughly worthless and even demonstrably false in material particulars. He argued that there were serious infirmities in this evidence, and that there had been little or no consideration thereof by the tribunal, and that its order was accordingly bad as based on misdirections and non-directions. We shall now consider these contentions. <PG>273</PG>