Case Law Headnotes Examples

EXAMPLE 1

Judgments Title      :   Commissioner Of Income Tax Central, Calcutta & Anr Vs Amalgamated Development, Ltd. Dated :     21.03.1967
Civil Appeals Nos.    :     169 and 170 of 1966..
Court                     :    Supreme Court         
Judges                   :     RAMASWAMI, V., SHAH, J.C., SIKRI, S.M

HEADNOTE/ABSTRACT

Income tax Act, 1922  sec. 10(2)(xv) company purchasing assets and liabilities of firm liabilities including obligation to complete development work on plots sold by firm Whether expenditure on such development deductible expenditure.   Income Assessee Company selling plots for part cash and balance secured by mortgage whether balance tantamount to loan to purchaser therefore whether liable to be regarded as constructive receipt of income. Dismissing the appeal,

(i) It is not a right approach to examine the question as if all revenue expenditure must be equated with expenditure in connection with stock in trade. In the present case, the sale deed dated July 7, 1948 showed that therespondent company purchased from the firm a whole running businesswith all its goodwill and stock in trade and including its liabilities. It could not be said that the respondent company had nothing to do with the lands already sold which did not form part of its stock in trade. The development of the entire land sold in plots was an integrated process and could not be sub divided into water tight compartment or related to any Particular piece of land. Furthermore, the entire expenditure was required to be incurred as a matter of commercial expediency.,

There was nothing to show that the obligation under the sale deed to complete the development work on the plots sold by the firm was quantified and formed part of the total consideration paid bythe respondent company.

(ii)The execution of the mortgage deeds by the purchasers of plots in respect of the balance of the consideration money could not be treated as equivalent to payment of cash. It cannot be said that the mere giving of security for the debt by the purchaser was tantamount to payment. The amount of consideration not received and which the purchasers agreed to pay in future for which plots were mortgaged in favour of the respondent company, could not therefore be considered to be taxable income for the assessment periods in question.

JUDGMENT

These appeals are brought, by certificate, from the judgment of the Calcutta High Court dated December 4, 1962 in Income Tax Reference No. 57 of 1958.

The respondent company purchased the assets and liabilities of the firm, Mugneeram Bangur & Co., (Land Department), hereinafter referred to as the 'firm', on July 7, 1948 for a consideration of Rs. 34,99,300/ . The consideration was paid by the issue of shares to the vendor or its nominees in the share capital of the respondent company. The assets included land at cost, Rs. 12,68,268/  as also goodwill and certain other assets subject to certain liabilities incurred by the firm. By the time the respondent company took over the land, the firm had sold a number of plots in respect of which part of the consideration money had been realised and for the balance Mortgage Bonds had been executed by the purchaser. In respect of those plots there was an undertaking to lay out roads, etc. The respondent company took over the debts as well as the liabilities. After the purchase, the respondent company itself sold certain other plots. The purchaser paid a percentage of the price in cash and undertook to pay the balance with interest at a specified rate in annual instalments which was secured by creating a charge on the land purchased. The sales made by the respondent company were in all material respects similar to the sales made by' the firm. A specimen copy of the sale deeds executed by the firm of the respondent company is Annexure 'A' to the Statement of the Case. The relevant provisions of the sale deed are as follows :

` And whereas the said Vendor hath agreed with the Purchaser to sell him the said land .... hereunder written at the rate of price or sum of Rs. 3,000/  per cotta free from all encumbrances. And Whereas the total amount of price payable in respect of the said plot.... at the rate aforesaid amounts to Rs. 8,708 5 6. And Whereas at the treaty for sale it was agreed by and between the partieshereto that one third or thereabout of the total price will be paid at the time of execution of these presents and the payment of the balance will be secured in the manner hereinafter appearing. Now This Indenture Witnesseth that in pursuance of the said Agreement and in consideration of the sum of Rs, 8,708 5 6 whereof the sum of Rs. 2,908 5 6 of lawful money of India to the said Vendor in hand well and truly paid by the Purchaser at or before the execution of these presents (the receipt whereof the said Vendor doth hereby as well as by receipt hereunder written admit and acknowledge) and the payment of the balance namely the sum of Rs. 5,800/  being secured under a security deed of even date with these presents and executed by the Purchaser in favour of the Vendor creating First Charge upon the said land ...

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EXAMPLE 2

Title         :    Collector Of Aurangabad & Anr Vs Central Bank Of India. Dated :     02.05.1967
Civil Appeals Nos.    :     169 and 170 of 1966..
Court             :    Supreme Court         
Judges            :     RAMASWAMI, V., SHAH, J.C., SIKRI, S.M

Head Note

Hyderabad Land Revenue Act (8 of 1317F), ss. 104, 116 and 119 whether s. 119 applies to movable property in the custody and possession of the Court-Whether taxes due to Government have priority over debts to Others-Doctrine of `Priority of Crown debts` applicability in Hyderabad State before the Constitution came into force.  
 (1) The construction put by the High Court on s. 119 was not correct. The section in general terms empowers the distraint and sale of the defaulter's movable property and there is nothing in its language or context which prohibits tile Collector from ,making an order of distraint with regard to the movable property in the custody and possession of a court. [859 C-F]

(2)But, a reading of ss. 104 and 116 of the Hyderabad Land Revenue Act, shows, that in respect of taxes other than Land revenue, only the procedure for recovery under s. 116 applies and not the substantive law of priority under s. 104 of the Act; and therefore the Government had no priority in 'respect of arrears of sales-tax over the dues of the firs', respondent. 1860 H-861 B]
(3)The Government could claim priority regarding payment of salestax according to the doctrine of `Priority of Crown debts'.', quite apart from the provisions of the Hyderabad Land Revenue Act, but there was no proof that the doctrine was given judicial recognition in the Hyderabad State prior to January 26, 1950, and therefore, the doctrine was not a `law in force` in that territory which was  continued by virtue of Art. 372(1) of the Constitution. [862 H-863A]

JUDGMENT

Ramaswami, J.
This appeal is brought, by special leave, from the judgment of the Bombay High Court dated December 17, 1962 in Letters Patent Appeal No. 29 of 1960.

Respondent No. 2, the firm of Chandmal Manmal was in debted to the 1st respondent, Central Bank of India, Aurangabad branch. On March 11, 1955 the first respondent filed a suit being Civil Suit No. 28/1 of 1955 against the second respondent for recovering a sum of Rs. 14,541/- and odd in the Court of Subordinate Judge at Aurangabad. On the application of the first respondent an order for interim injunction was passed in respect of certain properties belonging to the second respondent. The Court had ordered the second respondent to furnish security for the amount of the decree which may be passed against the firm in the suit. On April 28, 1955 Jogilal Mulchand, one of the partners of the second respondent furnished security by creating a charge on his immovable property, which was a house at Aurangabad. After the security bond was furnished, the attachment was released. The security bond furnished by Jogilal Mulchand read as follows :

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EXAMPLE 3

Title DR. N.B. KHARE Vs.THE STATE OF DELHI .. Dated 26.05.1950
Judges :  KANIA, HIRALAL J. (CJ), FAZAL ALI, SAIYID, SASTRI, M. PATANJALI,  MAHAJAN, MEHR CHAND

ABSTRACT / HEAD NOTE

Constitution of India, Art. 19, cls. (1) (d) and (5) Fundamental rights Freedom of movement Law imposing restrictions Validity Reasonableness trictions Scope of enquiry East Punjab Public Safety Act, 1949, s. 4 (1)(c),(3), (6) Provisions empowering Provincial Government or District Magistrate to extern persons making satisfaction of externing authority final, authorising externment for indefinite period, and directing that authority `may communicate`grounds of externment Whether reasonable Construction and Validity of Act.

JUDGMENT

KANIA C.J.
This is an application for a writ of 'certiorari and prohibition under article 32 of the Constitution of India.
The petitioner who is the President of the All India Hindu Mahasabha since December, 1949, was served with an order of externment dated the gist of March, 1950, that night. By that order he is directed by the District Magistrate, Delhi, not to remain in the Delhi District, and immediately to remove himself from the Delhi District and not to return to the District. The order was to continue in force for three months. By another order of the Madhya Bharat Government he was directed to reside in Nagpur. That order has been recently cancelled. The petitioner disputes the validity of the first order on the ground that the East Punjab Public Safety Act, 1949, under which the order was made, is an infringement of his fundamental right given under article 19 (1) (d) of the Constitution of India. He further contends that the grounds of the order served on him are vague, insufficient and incomplete. According to him the object of the externment order passed by the District Magistrate, Delhi, was to suppress political opposition to the policy of the Government in respect of Pakistan and the Muslim League. It is alleged that because the petitioner and the Hindu Mahasabha are against the Government policy of appeasement this order is served on him. It is therefore mala fide and illegal. In support of his contention about the invalidity of the East Punjab Public Safety Act and its provisions as regards externment, counsel for the petitioner relied on the recent unreported judgments of the Patna High Court in Miscellaneous Judicial Case No. 29 of 1950, Brijnandan v. The State of Bihar, and of the High Court of Bombay in Criminal Application No. 114 of 1950, Jai singhbhai Ishwarlal Modi.

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EXAMPLE 4

Title : DR. N.B. KHARE Vs.THE STATE OF DELHI-26.05.1950
Judges :  KANIA, HIRALAL J. (CJ), FAZAL ALI, SAIYID, SASTRI, M. PATANJALI,  MAHAJAN, MEHR CHAND

ABSTRACT / HEAD NOTE

Constitution of India, Art. 19, cls. (1) (d) and (5) Fundamental rights Freedom of movement Law imposing restrictions Validity Reasonableness trictions Scope of enquiry East Punjab Public Safety Act, 1949, s. 4 (1)(c),(3), (6) Provisions empowering Provincial Government or District Magistrate to extern persons making satisfaction of externing authority final, authorising externment for indefinite period, and directing that authority `may communicate`grounds of externment Whether reasonable Construction and Validity of Act.

JUDGMENT

KANIA C.J.
This is an application for a writ of 'certiorari and prohibition under article 32 of the Constitution of India.
The petitioner who is the President of the All India Hindu Mahasabha since December, 1949, was served with an order of externment dated the gist of March, 1950, that night. By that order he is directed by the District Magistrate, Delhi, not to remain in the Delhi District, and immediately to remove himself from the Delhi District and not to return to the District. The order was to continue in force for three months. By another order of the Madhya Bharat Government he was directed to reside in Nagpur. That order has been recently cancelled. The petitioner disputes the validity of the first order on the ground that the East Punjab Public Safety Act, 1949, under which the order was made, is an infringement of his fundamental right given under article 19 (1) (d) of the Constitution of India. He further contends that the grounds of the order served on him are vague, insufficient and incomplete. According to him the object of the externment order passed by the District Magistrate, Delhi, was to suppress political opposition to the policy of the Government in respect of Pakistan and the Muslim League. It is alleged that because the petitioner and the Hindu Mahasabha are against the Government policy of appeasement this order is served on him. It is therefore mala fide and illegal. In support of his contention about the invalidity of the East Punjab Public Safety Act and its provisions as regards externment, counsel for the petitioner relied on the recent unreported judgments of the Patna High Court in Miscellaneous Judicial Case No. 29 of 1950, Brijnandan v. The State of Bihar, and of the High Court of Bombay in Criminal Application No. 114 of 1950, Jai singhbhai Ishwarlal Modi.

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EXAMPLE 5

Title :   BALKRISHNA SOMNATH Vs. SADA DEVRAM KOLI & ANOTHER- Dated 20.01.1977
JUDGES  : KRISHNAIYER, V.R., GUPTA, A.C

ABSTRACT / HEAD NOTE

Bombay Tenancy & Agricultural Lands Act, 1948 (Bombay Act LXVII of 1948) as amended by Bombay Act Xlll of 1956, section 32--Scope of--Interpretation of the words `disabled person's share in the joint family has been separated by metes and bounds` occurring in proviso to s. 32 F(1)(a).
 (1) The broad idea is to vest full ownership in the tenantry. A compassionate exception is made in favour of a handicapped landlords who' cannot prove their need to recover their land on approved grounds. The Legislature conditioned the proviso by insisting that the separation should be from the whole joint family assets and not a tell-tale transaction where agricultural lands alone are divided and secondly even where there iS a total partition only a fair proportion of the lands is allotted to the disabled person. [682 C-D-F]

What section 32F(1) insists upon is that (a) share of such person in the joint family has been separated by metes and bounds; (b). the Mamlatdar is satisfied that the share of the disabled person in the land is separated in the same proportion as the share of that person in the entire joint family property and not in a larger proportion. [681 G]

(3) The imperative condition for the operation of the proviso is that there should be a total separation and so far as a disabled member is concerned, it must cover all the joint family properties. The usage of the expressions `the share of such person in the joint .family`, `the share of. such person,, in the land`, `the share of that person in the, entire joint family property in the section the clear statement in the proviso that the disabled person s share in the joint family must have been separated by metes and bounds and the statutory exercise expected of the Mam- latdar by the proviso involving an enquiry into the share of the disabled person in the land and its value, the share of that person in the entire joint family properties, theproportion that the allotment of the land bears to his share in the entire joint family property with a view to see that there is no unfair manouvre to defeat the scheme of the Act-lead to the necessary postulate that it is not confined to the share of the land only but really means his share in the entire joint family property. [683 E-H, 684 A]

(4) In the instant case there is no division of all the joint family property. Only the landed properties have been separated. [684-B]

Observation:

The reform of the inherited law-making methodology may save court time and reduce litigation. Our legislative process, not an unmixed blessing, works under such instant stress and ad hoc hephazardness that the whole piece of legislation when produced makes experienced draftsmen blush, as in the instant case, the involved drafting of s. 32F has had its share in the marginal obscurity of meaning. [682 B-C]

JUDGMENT

KRISHNA IYER, J.
These two appeals raise a short issue of interpretation of the proviso to s. 32F (1) (a) of the Bombay Tenancy and Agricultural lands Act, 1948 (Bombay Act LXVII of 1948) (hereinafter referred to as the Act). The appellants in both the cases are the aggrieved landlords, the tenants' right of purchase under the Act having been upheld by the High Court. The correctness of this view is canvassed ,before us by counsel.

The facts necessary to appreciate the rival contentions may be are different but the issue is identical and, stated briefly. The parties so a single judgment will dispose of both the appeals.


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