May 3.
An appeal to the Appellate Assistant Commissioner also failed.
K. Daphtary, Solicitor General of India, N. D. Karkhanis, R. H. Dhebar, and P. D. Menon, for the appellant V. Viswanatha Sastri and K. B. Chaudhuri, for the respondent.
The Judgment of the Court was delivered by HIDAYATULLAH, J. This appeal by the Commissioner of Income tax, Mysore, on a certificate granted under a. 66A of the Indian Income tax Act, is directed against a judgment of the High Court of Mysore dated September 7, 1959, by which the following question referred by the Income tax Appellate Tribunal, Madras Bench, was answered in favour of the respondent Whether there are materials for the tribunal to hold that the sum of Rs.
The respondent is a limited liability Company called the Mysore Sugar Co. Ltd., in which a very large percentage of shares is owned by the Government of Mysore.
Appeal from the order dated September 7, 1959, of the High Court of Mysore at Bangalore, in Income tax Referred case No.
435 of 1961.
The asseesee Company purchases sugarcane from the sugarcane,growers, and crashes them in its factory to prepare sugar.
We shall refer to the respondent as the assessee Company.
by the assessee Company.
Before the Income tax Appellate Tribunal, Madras.
A crop of sugarcane takes about 18 months to nature, and these agreements take place at the harvest season each year, in preparation for the next crop.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The advances made in 1948 49 thus remained unrecovered, because they companyld only be recovered by the supply of sugarcane to the assessee Company.
For this purpose, an account of each Oppigeddar is opened.
This report was made by the Committee on July 27, 1950, and the whole of the report has been printed in the record of this case.
In the year 1948 49 due to drought, the assessee Company companyld number work its sugar mills and the Oppigedars companyld number grow or deliver the sugarcane.
The Mysore Government realising the hardship appointed a Committee to investigate the matter and to make a report and recommendations.
The Income tax Officer declined to make the deduction, because, in his opinion this was neither a trade debt number even a bad debt but an ex gratia payment almost like a gift.
From the order of reference, it appears that the Appellate Tribunal was also of the opinion that these advances were made to ensure a steady supply of quality sugarcane, and that the loss, if any, must be taken to represent a capital loss and number a trading loss.
2 of 1955.
