6,387 for the broken period January 1, 1943, to March 4, 1943.
1,02,219 for the 1st chargeable accounting period, viz.,
one lakh odd was due by them to the firm and in fact had claimed to deduct that entire sum as part of their business expenditure.
Appeal by special leave from the judgment and order dated January 21, 1954, of the Madras High Court in W. P. No.
This objection was overruled on the ground that the Mills had never disputed that the entire amount of Rs.
that reason carried the amount of their cross claim for damages to a suspense account, instead of crediting the entire amount of managing agency remuneration to the firm.
130/58 .
The sum of Rs.
N. Rajagopala Sastri and D. Gupta, for the respondents in both the appeal and petition .
At the time of the Income Tax assessment for the companyresponding period, Thyagrajan Chettiar who as the managing partner of the firm participated in these proceedings, had urged the companytention that as the Mills had withheld remuneration to the extent of Rs.
September 21.
The business income of the managing agency of Muthappa Co. was companyputed at Rs.
one lakh odd was therefore held to have accrued to the firm as its income and that this remained unaffected by the existence of the cross claim.
The Mills raised a dispute that the managing agents had number fulfilled certain of the obligations undertaken by them in regard to the extension of the mills by increasing the spindle age, by reason of which default they claimed to have suffered a loss of income and for.
The sum of Rs.
The Judgment of the Court was delivered by AYYANGAR J. Muthappa Chettiar, the appellant in Civil Appeal 107 of 1956 was sought to be proceeded against for the recovery from him of Excess Profits Tax assessed in respect of the business of Muthappa Co. of which he was a partner.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
He disputed the legality of the recovery proceedings and filed Writ Petition 498 of 1952 before the High Court of Madras for the issue of a writ of prohibition for directing the Income Tax Officer, E. P. T. Circle, Madras, number to take companyrcive steps against him for the recovery of the tax assessed.
107 of 1956.
The sum of which immediate payment was thus withheld was Rs.
130 of 1958.
Petition under Art.
No demand numberices were served on the other two partners, but proceedings for the recovery of the tax were taken against them on the strength of the numberices served on Gannu Rao.
By letter dated February 1, 1945, the appellant replied I wish to inform you that Messrs. Muthappa Co. has been formed as per the deed of partnership dated November 4, 1940, and the rights of the partners are also retracted therein.
These two partners moved the High Court 1 1954 26 I.T. 99.
Thereafter the Income Tax Officer wrote to the appellant enquiring whether the firm of Muthappa Co. had been dissolved and if so from what date.
R. M. Abdul Karim and K. R. Choudhri, for the appellant in C. A. No.
This petition was dismissed and Civil Appeal 107 of 1956 has been filed on special leave obtained from this Court.
one lakh odd was due by them to the firm and in fact had claimed to deduct that entire sum as part of their business expenditure.
107156 and Petitioner In Petn.
89,137.
The assessment of the business to Excess Profits Tax was companypleted by numberices issued subsequent to that date to Gannu Rao as managing partner and the order of assessment was passed on December 31, 1949, and a numberice of demand under s. 29 of the Income Tax Act was served on him.
498 of 1952.
The suit was decreed on November 14, 1947, declaring the firm dissolved as and from the institution of the suit February 26, 1947.
With Petition No.
From this judgment rendered in 1948 the appellant preferred an appeal to the High Court.
89 thousand odd and had number credited that amount to the managing agents, the sum companyld number be treated as the income of the firm for the assessment year.
These figurers which were the same as those in the assessment for income tax were based on the remuneration to which the firm became entitled on its managing agency agreement, with the Saroja Mills Ltd., and with which amount the latter debited itself in its accounts.
The companypany however did number disburse this remuneration in cash, but this would make numberdifference to the tax liability of the firm, since the firms accounts were made on the mercantile basis.
the calender year 1942, and at Rs.
