| Case ID |
39324288-0278-4504-9d78-7c64f73ee4a6 |
| Body |
View case body. Login to View |
| Case Number |
IT MISC. CASE No. 219 OF 1957 |
| Decision Date |
Dec 10, 1957 |
| Hearing Date |
|
| Decision |
The court held that the two businesses carried out by the assessee during the chargeable accounting periods in question were covered by the provisions of section 5 of the Excess Profit Tax Act, thereby allowing the assessee to claim a set-off for the deficiency of profits against the excess profits earned in the preceding period. The decision emphasized that all businesses carried out by one person are treated as one business under the Act, thus enabling the adjustment of deficiencies across chargeable accounting periods. The ruling was favorable to the assessee, allowing tax relief based on the principle that the continuity of ownership in business should allow for the seamless application of tax provisions. |
| Summary |
In the case of Sita Ram Kayan v. Commissioner of Income Tax, the Allahabad High Court dealt with the interpretation of the Excess Profits Tax Act, 1940, particularly sections 5 and 7. The case involved an individual who had previously been assessed to excess profits tax during a chargeable accounting period but subsequently closed his business and started a new one in a later period which yielded lower profits. The court ruled that both businesses were to be treated as one under the provisions of the Act, allowing the taxpayer to offset the losses from the new business against the profits from the previous business. This case is significant for understanding tax law, particularly in the context of how businesses are assessed under changing circumstances and the importance of continuity in ownership for tax liability. The ruling reinforces the legal principle that deficiencies in one chargeable accounting period can be adjusted against profits in another, providing a favorable outcome for taxpayers operating multiple businesses. Keywords such as 'Excess Profits Tax', 'tax relief', 'business continuity', and 'tax law interpretation' are crucial for SEO optimization. |
| Court |
Allahabad High Court
|
| Entities Involved |
Not available
|
| Judges |
Bhargava, J.,
Chaturvedi, J.
|
| Lawyers |
R.L. Gulati,
J. Swarup
|
| Petitioners |
Sita Ram Kayan
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1958 SLD 279,
(1958) 34 ITR 841
|
| Other Citations |
John Smith and Son v. Moore (H.M. Inspector of Taxes) [1920] 12 Tax Cas. 266,
Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax [1954] 26 ITR 765 (SC),
P.A.C. Ramaswami Raja v. Commissioner of Excess Profits Tax [1954] 25 ITR 9 (Mad.),
Sohan Pathak and Sons v. CIT [1953] 24 ITR 395 (SC)
|
| Laws Involved |
Excess Profit Tax Act, 1940
|
| Sections |
7,
5
|