| Case ID |
0468f076-6953-480f-8630-ac17509fb0c1 |
| Body |
View case body. Login to View |
| Case Number |
13935 |
| Decision Date |
Sep 28, 1938 |
| Hearing Date |
Sep 28, 1938 |
| Decision |
The court ruled in favor of the assessees, determining that they were entitled to set off business losses against their income from other sources for the assessment year 1933-34. The income tax authorities had initially rejected their claim citing succession issues as the businesses were transferred to new companies. However, the court clarified that the new companies were not in existence during the relevant accounting year and could not sustain losses or gains. The court emphasized that the assessees had sustained losses during the accounting year and were therefore entitled to claim the set-off under section 24(1) of the Indian Income-tax Act, 1922. |
| Summary |
The case revolves around B.K. Paul & Co., an undivided Hindu family, who faced issues with the Income-tax Officer regarding set-off of business losses against their income from real property and securities. The accounting year ended on April 13, 1933, marked a significant point where the family received income but suffered losses in 17 businesses. The delay in the assessment process led to complications when four new companies were formed to take over the businesses. The income tax authorities denied the set-off for losses incurred by the businesses transferred to these new companies, citing the provisions of section 26(2) of the Income-tax Act, 1922. However, the court found that the new companies were not operational during the accounting year and thus, the original assessees retained the right to claim losses. This case highlights the importance of understanding the legal ramifications of business succession and the rights of assessees in claiming tax benefits under the Income-tax laws. |
| Court |
Calcutta High Court
|
| Entities Involved |
Not available
|
| Judges |
SIR HAROLD DERBYSHIRE, C.J.,
KHUNDKHAR, J.,
MUKHERJEA, J.
|
| Lawyers |
Not available
|
| Petitioners |
B.K. Paul & Co.
|
| Respondents |
Not available
|
| Citations |
1938 SLD 29 = (1938) 6 ITR 395
|
| Other Citations |
CIT v. Best & Co. [1931] I.L.R. 55 Mad. 832,
CIT v. Nachal Achi [1933] 1 ITR 32 (Mad.),
Bhogilal Hargovandas Patel v. CIT, Bombay [1937] (1937 I.T.R. 555 ; 9 I.T.C. 110),
Maharaja of Darbhanga v. CIT[1934] (161 I.A. 312 ; 1934 I.T.R. 345 ; 13 Pat. 637),
Ram Rakha Mal & Sons v. CIT, Punjab [1937] (I.L.R. 1937 Lah. 325 ; 1937 I.T.R. 137)
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
71,
188,
24(1),
26(2)
|