6,00,000/ .
The Income tax Officer rejected the claim of the assessees that the amount of Rs.
Services of auditors, brokers and solicitors have been employed in companypleting the sale.
Appeal by special leave from the judgment and order dated March 11, 1963 of the Calcutta High Court in Income tax, Re ference No.
Later, the assessees submitted a revised return excluding the amount of Rs.
M s. Mangturam Jaipuria also obtained a letter of guarantee for Rs.
The principal partner of the assessees did number give evidence.
Thereafter the amount of Rs.
The Appellate Assistant Commissioner then reported that the payment of Rs.
1,75,000/ was a number recurring casual receipt exempt from tax under s. 4 3 vii of the Act or that it was a capital and number revenue receipt.
6,00,000/ was number made only as an inducement to the assessees to refrain from companypetition in purchasing the companytrolling interest in the Company, but it was made to remunerate the services rendered by the assessees and their associates in helping M s. Mangutram Jaipuria to acquire the companytrolling interest.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
Ramgopal Agarwalla another partner of the firm who appeared before the Appellate Assistant Commissioner pleaded.
About the month of April, 1946 M s. Mangturam Jaipuria acting through their partner Anand ram Gajadhar were also negotiating to secure the companytrolling interest in the Company.
6,00,000/ was duly paid to David Mitchell, Rowan Hodge and the assessees, and it was divided equally between them each receiving Rs.
It was originally managed by a firm of Managing Agents styled M s. Horseman Brothers.
80 of 1959.
4,03,00,000/ .
Sen, A.N. Kirpal and R.N. Sachthey, for the respondent.
Some time early in 1946 M s. Horseman Brothers desired to dispose of their share holding in the Company, and to part with the Managing Agency.
The assessees paid Rs.
The Judgment of the Court was delivered by Shah J. M s. Ram Kumar Agarwalla Brothers hereinafter called the assessees were carrying on business at Calcutta as share brokers, share dealers and paper merchants, Swadeshi Cotton Mills idea public limited companypany operates at Kanpur a large unit producing companyton textiles.
David Mitchell a partner of M s. Lovelock Lewis accountants of the Company Rowan Hodge of M s. Orr Dignam Co. solicitors of the Company and the assessees started joint negotiations with M s. Horseman Brothers to purchase the companytrolling interest in the Company.
T. Desai and J.P. Goyal, for the appellant.
The Tribunal had directed that certain persons including Ram Kumar Agarwalla the principal partner of the assessees be examined as witnesses.
1,75,000/ as brokerage in their profit loss account, and submitted a return of income for the assessment year 1947 48 showing that receipt as income from brokerage in the companyrse of business.
M s. Mangturam Jaipuria purchased the shareholding of M s. Horseman Brothers for Rs.
25,000/ out of their share to one Ratan Lal Goel for services rendered in the dear, and credited the balance of Rs.
The Tribunal submitted a statement of the case on the following two questions, on application by the assessees, under s. 66 1 of the Income tax Act Whether there was any material on record before the President to give a finding to the effect that the companytention of the assessee that it intended to buy the Mills was without any basis whatsoever ?
176 of 1966.
2 lakhs.
6,00,000/ from the Imperial Bank of India in favour of David Mitchell.
The order was companyfirmed by the Appellate Assistant Commissioner.
With special leave, the assessees have appealed to this Court.
The Tribunal agreed with the report of the Appellate Assistant Commissioner and dismissed the appeal.
2,00,000 was received by them as companysideration for agreeing to refrain from carrying on their business and was on that account number taxable as their income, and that in any event it was a number recurring casual receipt, there was difference of opinion between the two Members who companystituted the Appellate Tribunal, and the appeal was referred to a third Member who remanded the case for a finding on certain matters on which the order of the Appellate Assistant Commissioner was silent.
1,75,000/ .
M s. Mangturam Jaipuria addressed a letter on April 29, 1946 to David, Mitchell to the following effect With reference to your negotiations to acquire the companytrolling interest in the Swadeshi Cotton Mills Co. Ltd., we companyfirm that we and our associates are desirous of purchasing the same and in the event of your securing the same for us and upon your giving up all claims to purchase the same and assigning to us and our associates any interest that you may have acquired therein, we hereby agree to pay you and your companyleagues a capital sum of Rs.
