TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether, in determining the tax character of the transaction embodied in the agreement dated 19 February 1962, the revenue was bound by the document alone or was entitled to look beyond it to ascertain the true legal character of the transaction.
Analysis: The reference concerned the assessment year 1964-65 and turned on whether the amounts received under the agreement were capital receipts or income. The controlling principle applied was that the taxing authority is not confined to the nomenclature or apparent form adopted by the parties; the true legal character of the transaction must be ascertained from the legal rights created and, where appropriate, from the surrounding facts and circumstances. A tribunal of fact may therefore examine extrinsic evidence to determine whether the document reflects the real bargain between the parties. The view that the written agreement was conclusive and that the revenue could not go behind it was held to be erroneous.
Conclusion: The revenue was entitled to go behind the document and determine the true legal character of the transaction; the answer to the referred question was in the negative and in favour of the Commissioner of Agricultural Income-tax.
Ratio Decidendi: In tax matters, the substance of the transaction as disclosed by the legal rights and real bargain of the parties prevails over the mere form or nomenclature used in the document, and extrinsic evidence may be used to determine that true character.
TaxTMI 
