| Case ID |
e2b09fc6-304a-4bcb-804f-93b8071efe77 |
| Body |
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| Case Number |
D-2741 of 1967 |
| Decision Date |
Jan 01, 1967 |
| Hearing Date |
Jan 01, 1967 |
| Decision |
The court held that the addition of Rs. 76,500 to the assessable income of the assessee was not justified. The court found that the 5,100 shares were withdrawn by the assessee from the stock-in-trade of the joint venture at cost, and no profit accrued to the joint venture in respect of those shares. The income tax authorities were required to show that the Rs. 76,500 was indeed income of the assessee, which they failed to do. Therefore, the court ruled that the revenue's claim to tax the assessee on this amount was not valid. The court also clarified that the right to the issue of deferred shares was capital in the hands of the assessee and the profit realized from their sale was a capital receipt. Thus, the addition made in the assessable income of the assessee was deleted. |
| Summary |
In this landmark case from 1967, the Gujarat High Court addressed significant issues regarding the taxation of income arising from a joint venture. The case involved the interpretation of the Income-tax Act, 1961, and its sections related to income assessment. The court examined whether profits from shares taken over by the assessee were to be considered as income or capital. The judgment emphasized the importance of properly interpreting statements of account and highlighted the distinction between capital receipts and assessable income. This case is crucial for understanding the taxation of joint ventures and the treatment of capital gains in income tax assessments. Keywords: Income-tax Act, joint venture, capital receipts, assessable income, Gujarat High Court, taxation law. |
| Court |
Gujarat High Court
|
| Entities Involved |
Not available
|
| Judges |
BHAGWATI,
DIVAN
|
| Lawyers |
S.P. Mehta,
K.H. Kaji,
J.M. Thakore,
M.M. Thakore,
M.G. Doshit,
K.L. Tansania
|
| Petitioners |
Chunilal Khushaldas Patel
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1967 SLD 492,
(1967) 66 ITR 522
|
| Other Citations |
Not available
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
143,
28(i),
23,
10(1)
|