1939 (10) TMI 11

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.... K.V. Sesha Iyengar for the Respondent JUDGMENT On the 19th November 1931 the assessee acquired from the Rajah of Ramnad the exclusive right to collect conch shells from certain conch beds belonging to him. The period for which the concession was granted was three years and seven months from 1st December 1931 to 30th June 1935 and the consideration was the sum of Rs. 10,500 payable in inst....

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....n Income-tax Act, 1922. The case is governed by authority of this Court, and the answer which must be given to this reference is against the assessee. This very question arose in Commissioner of Income-tax, Madras v. Chengalvaraya Mudaliar AIR 1934 Mad. 617 which was decided by a Full Bench consisting of Beasley, C.J., and Ramesam and Sundaram Chetty, JJ. There the assessee entered into an agre....

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....ding money for the purpose of the concern. In the former case the expenditure was of a capital nature in the latter case it was of the nature of an ordinary business expenditure. The same question arose with regard to a shell concession in Commissioner of Income-tax, Madras v. Messrs. P.T. Chengalvaraya Chettiyar and P.L.M.M.V.S. and Company, Madras, (1937) Mad. 792, where a Full Bench consisting ....

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.... in certain dumps for the purpose of extracting gold. The Crown contended that the company's rights were part of the undertaking which the company was formed to acquire and any money paid for the acquisition of the dumps was capital expenditure. It was held that it was toot and that the dumps were part of the stock-in-trade of the company. Romer, L.J., put the position very concisely "Are the ....