TaxTMI 
TaxTMI 
1961 (3) TMI 1
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....ess of wine merchants at Bombay and came into existence prior to April 1, 1939. The firm had been assessed to income-tax under the provisions of the Income-tax Act of 1918. The firm which was registered under the provisions of the Income-tax Act of 1922 (hereinafter termed the " Act ") was dissolved on March 24, 1945, and from the day following that, i.e., March 25, 1945, a private limited company, i.e., S. S. Miranda & Co. Ltd., succeeded to the business of the firm. A claim made under section 25(4) of the Act to the effect that no tax was payable on the profits of the registered firm for the period between April 1, 1944, to March 24, 1945, was allowed. In respect of the chargeable accounting period April 1, 1944 to March 24, 1945, the reg....
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.... pursuance of section 10 of the Indian Finance Act, 1942, or section 2 of the Excess Profits Tax Ordinance, 1943, is profits from business for the purposes of section 25(4) of the Indian Income-tax Act ? " The High Court held that the amount so refunded was income from other sources taxable under section 12 of the Act and the appellants were, therefore, not entitled to the benefit of section 25(4) of the Act. In dealing with the nature of the tax the learned Chief Justice said : " Clearly the view of the Legislature was that this income should be treated as a statutory income with the consequences that must necessarily follow by reason of its being a statutory income. " It was argued on behalf of the appellants that the amount refunde....
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.... Kingdom shall be treated, for the purpose of assessment to income-tax and super-tax, as income of the previous year during which the repayment is made. " It is not necessary to quote section 10(1) of the Finance Act, 1942, or the relevant provisions of the Excess Profits Tax Ordinance, 1943. Section 12(1) of the Excess Profits Tax Act shows that the amount of excess profits tax payable in respect of a business for any chargeable accounting period was an allowable expenditure. Under section 11(11) of the Indian Finance Act, 1946, any excess profits refunded under the provisions of the Indian Finance Act, 1942, or of section 2 of the Excess Profits Tax Ordinance, 1943, were deemed to be income and were to be treated as income of the previo....
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....f the opinion that the intention of the Legislature in section 11(14) of the Finance Act, 1946, which was the section applicable in that case and of rule 4(1) of the English Income Tax Act was the same. The operative words of section 11(11) of the Finance Act, 1946, and of section 11(14) of that Act are almost identical. It would thus appear that the amount of excess profits tax was an allowable deduction for the purpose of computation of the business profits of an assessee under section 12(1) of the Excess Profits Tax Act and when it or a portion of it was refunded it had to be treated as income of the assessee. When it was deposited with the Central Government it was a portion of the profits of the business of the assessee and when it w....
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....ect of what is that payment made ? It is not a legacy, it is not a sum which has fallen from the skies ; it is a sum which is repaid because there was too large a sum paid by the company to the revenue authorities over the whole period during which excess profits duty was paid, and that sum means and is intended to represent a repayment of a sum which was paid by them in respect of the duty charged upon the excess profits of their trading. It comes back, therefore, not having lost its character but being still the repayment of a sum--too much, it is true,--but a sum taken out of the profits which were made by the company in the course of its trading, profits which at the time they were made were subject to income-tax and subject to excess p....