| Case ID |
25fed1cc-2159-4a43-b55d-798f99b3e059 |
| Body |
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| Case Number |
MISC. CASE No. 434 OF 1962 |
| Decision Date |
Feb 16, 1966 |
| Hearing Date |
|
| Decision |
The High Court ruled that the disputed amount of Rs. 43,333 was income accrued to the assessee and should be considered as part of the assessable income. The court emphasized that the income accrued irrespective of its retention by the Corporation for adjustment against dues owed by Sharma & Co. The court clarified that the retention of the amount did not equate to a diversion of income but rather an application of income after its accrual. The ruling reinforced the principle that income, once accrued, is subject to taxation regardless of its subsequent application or retention. |
| Summary |
In this significant case, the Allahabad High Court addressed crucial questions regarding the accrual of income and the treatment of retained amounts for tax purposes under the Income-tax Act. The case revolved around the income earned by M.K. Brothers Private Limited and the amounts retained by the British India Corporation Limited for adjusting dues owed by Sharma & Co. The court's decision underscored the importance of recognizing accrued income for taxation, clarifying that retention of income for adjustments does not negate its accrual status. This ruling is pivotal for tax compliance and understanding income recognition in business transactions, making it essential for legal practitioners and tax advisors to consider similar implications in their cases. The judgment highlights the need for businesses to accurately report their income and understand the tax obligations arising from accrued amounts. As businesses navigate through complexities of tax laws, this case serves as a reference point for ensuring compliance and proper accounting practices, particularly in transactions involving adjustments of income. |
| Court |
Allahabad High Court
|
| Entities Involved |
British India Corporation Limited,
Sharma & Co.
|
| Judges |
M.C. Desai, CJ,
S.C. Manchanda, J
|
| Lawyers |
Not available
|
| Petitioners |
M.K. Brothers Private Limited
|
| Respondents |
Commissioner of INCOME TAX
|
| Citations |
1967 SLD 166 = (1967) 63 ITR 28
|
| Other Citations |
Poona Electric Supply Co. Ltd. v. Commissioner of Income-tax [1965] 57 ITR 521,
Commissioner of Income-tax v. Bansilal Motilal AIR 1930 Bom. 381,
E.D. Sassoon & Co. Ltd. v. Commissioner of Income-tax [1954] 26 ITR 27,
Sitaldas Tirathdas [1961] 41 ITR 367
|
| Laws Involved |
Income-tax Act
|
| Sections |
66(1),
10(2)(xv)
|