| Case ID |
25d25ab2-4b0d-4440-bde8-6371267e493c |
| Body |
View case body. Login to View |
| Case Number |
IT REFERENCE No. 69 OF 1965 |
| Decision Date |
Aug 14, 1974 |
| Hearing Date |
|
| Decision |
The Tribunal upheld the AAC's decision, concluding that the profit from the sale of machinery, amounting to Rs. 2,70,593, could not be taxed under section 10(2A) of the Indian Income-tax Act, 1922. The ruling emphasized that the profit was not related to any loss suffered due to depreciation allowances in prior years. The court clarified that capital gains arose from the sale price exceeding the written down value of the assets sold, and thus, the conditions for invoking section 10(2A) were not satisfied. The decision favored the assessee, affirming the exemption of the profit from taxation. |
| Summary |
In the case of Commissioner of Income Tax v. Gagalbhai Jute Mills Ltd., the Bombay High Court addressed the tax implications of profits realized from the sale of machinery that was not utilized during the relevant accounting year. The court ruled on the application of sections 10(2A) and 10(2)(vii) of the Indian Income-tax Act, 1922, determining that the profit amounting to Rs. 2,70,593 was not assessable under these provisions. The Tribunal and subsequently the High Court held that the amount in question was capital gains rather than taxable income, as it did not relate to any prior depreciation losses. This case highlights the nuances of tax law concerning capital gains and exemptions in the context of machinery sales, providing clarity for future assessments. Key terms include capital gains, income tax exemptions, and the Income-tax Act. |
| Court |
Bombay High Court
|
| Entities Involved |
Commissioner of Income Tax,
Gagalbhai Jute Mills Ltd.
|
| Judges |
KANTAWALA, CJ,
TULZAPURKAR, J
|
| Lawyers |
Not available
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Gagalbhai Jute Mills Ltd.
|
| Citations |
1979 SLD 760,
(1979) 116 ITR 602
|
| Other Citations |
Liquidators of Pursa Ltd. v. CIT [1954] 25 ITR 265,
Western India Match Co. Ltd. v. CIT (I.T.R. No. 25 of 1950),
Gujarat Ginning Mfg. Co. Ltd. v. CIT (Income-tax Reference No. 24 of 1954),
CIT v. National Syndicate [1961] 41 ITR 225,
CIT v. P.K. Badiani [1970] 76 ITR 369 (Bom)
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
41(1),
10(2A),
10(2)(vii),
12B(2)
|