1971 (5) TMI 25

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....sessee paid a sum of Rs. 7,500 to the said F. W. Heilgers & Co. Ltd., as consideration for the purchase of the mines, veins, seams or seam strata layers, and beds of fireclay in the land of the mine called " Churulia Mine ". On the 13th July, 1944, a company called the New Churulia Coal Co. Ltd. was incorporated. On August 16, 1944, the assessee received a sum of Rs. 6,50,000 from the New Churulia Coal Co. Ltd. as consideration for the purchase of the coal mine. On January 5, 1945, the assessee sold the mines, veins, seams or seam strata layers and beds of fireclay in the coal mine to the New Churulia Coal Co. Ltd. at a price of Rs. 1,10,000. The conveyance for the sale of the mining rights was executed by the Churulia Coal Co. Ltd....

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....ulia Coal Co. Ltd. The said Churulia Coal. Co. Ltd. received a sum of Rs. 6,50,000 from the assessee as consideration for the sale of the mine. About four months after the receipt of this money, says the Tribunal, a new company was incorporated in the name of New Churulia Coal Co. Ltd. on the 13th July, 1944. The Tribunal has inferred from the date of incorporation that the arrangement for incorporating the new company was made some time before that date. Immediately after the incorporation, the New Churulia Coal Co. Ltd. purchased the coal mine and paid the sum of Rs. 6,50,000 to the assessee. The conveyance was executed, the Tribunal points out, by the Churulia Coal Co. Ltd. directly in favour of the New Churulia Coal Co. Ltd. According t....

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....ofit. The following question has been referred to this court : " Whether, on the facts and in the circumstances of the case, the surplus amounting to Rs. 1,01,854 arising from the sale of the fireclay rights was taxable under the Indian Income-tax Act, 1922 ? " Mr. Debi Pal, learned counsel for the assessee, has argued before us that the Tribunal proceeds on the proposition that the purchase of mines, veins, seams or seam strata layers and beds of fireclay in the land cannot be detached from the purchase of coal mine. The Tribunal has failed to consider the purchase and sale of fireclay rights independently of the purchase and sale of the coal mine. This approach of the Tribunal, submits Mr. Pal, is a misdirection in law. There is ....