1959 (4) TMI 6

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....nd machinery over the written down value of the business of the said newspapers publications could in law be termed to be income, profits and gains of the petitioner ? " The facts which led to this appeal may be shortly stated. The appellant was the sole proprietor of the business which he carried on of publishing two newspapers, namely " The Indian National " and "Aryavart " and which business had some assets. The Income-tax authorities had from time to time allowed to the appellant depreciation on the said assets for several years. In the accounting year 1356 Fasli corresponding to the assessment year 1950-1951, the appellant converted his said proprietary business into a private limited company. The entire capital of the newly-floated ....

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....ns came to Rs. 1,51,744. The appreciated value of these assets therefore aggregated to Rs. 2,06,343 which was in excess of the depreciation amount already allowed namely, Rs. 1,30,785. The Income-tax Officer while assessing the appellant's income for the assessment year 1950-51 was of the opinion that the appellant had sold to the private limited company these assets at an appreciated value and realised profits thereby and since the difference between the original cost and the written down value, namely Rs. 1,30,785, was less than the appreciated sale price of Rs. 2,06,343, the entire amount of Rs. 1,30,785 was income, profits or gains in the hands of the appellant liable to be assessed during the relevant assessment year, and assessed the ....

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....ed company which according to his submission was in no manner distinct and separate from the appellant himself and whether profits earned by the appellant in the matter of the said transaction of the transfer of the assets from himself as the proprietor to the newly floated private limited company as the transferee could be profits or gains in the real and commercial sense of the term was really a question of law and if regard be had to the observations of this court in the majority judgment in Kikabhai Premchand v. Commissioner of Income-tax that it was open to the court to lift the veil of corporate entity and look behind the same in order to see who were the real parties to the transaction, the present case would really come within the d....