Tata Aircraft Ltd. sent a reply, dated.
The assessee later on arranged on November 30, 1946 with the financiers to withdraw from the old arrangement recorded in the letter, dated October 31, 1946.
Appeal by special leave from the judgment and order dated September 29, 1961 of the Bombay High Court in Income tax Reference No.
The assessee did number have enough funds with him.
10 lakhs.
The assessee companytended that only a sum of Rs.
1,87,000 had been received by him and number Rs.
1,87,000 in the hands of the assessee is a revenue receipt and liable to income tax ?
1,87,000 was a trading receipt.
The Judgment of the Court was delivered by Grover, J. This is an appeal by special leave from a judgment of the Bombay High Court answering the following question referred to it by the Income Tax Appellate Tribunal in the affirmative and against the assessee Whether on the facts and circumstances of the case the receipt of Rs.
November 1, 1946, companyfirming the sale on the terms and companyditions given in that letter.
The aforesaid firm appealed to the Tribunal which held that only a payment of Rs.
For the assessment year 1947 48 the Income Tax Officer reopened the assessment of the assessee under S. 34 of the Income Tax Act, hereinafter called the Act on the ground that the income of Rs.
On November 22, 1946 an agreement of partnership was entered into between six persons, namely, Nathmal, Pokhraj, Chandumal, Prithviraj, Shapoorji Co. Ltd. and Jamalbhai.
This partnership took over the companytract of purchase entered into by Pokhraj Hirachand.
The assessee used to carry on his business under the name and style of Milkhiram Bros. He was being assessed from the year 1945 46 onwards.
The amount of Rs.
1,87,000 was capital and number revenue.
It was registered by the Income tax authorities for the assessment year 1948 49.
in a rupee.
The agreed purchase price of the parachutes was approximately Rs.
On October 31, 1946 he secured a companytract for the purchase of approximately 1,28,499 parachutes from Tata Aircraft Ltd. The parachutes belonged to the Government of India and the Tata Aircrafts Ltd. was acting as the agent of the Government.
The assessee had to make a deposit by way of earnest money of a sum of Rs.
3,00,000 being the payment made to the assessee under the arrangement mentioned above.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
46 of 1969.
The assessee addressed a letter, dated October 29, 1946 to Tata Aircraft Ltd. companytaining an offer.
He entered into an arrangement with M s. Nathmal Nihalchand, Pokhraj Hirachand and Harilal Hargovandas for financing the business.
3,00,000.
The companytract was entered into by means of letters.
The Income tax authorities disallowed the claim on the ground that it was a capital payment.
M s. Pokhraj Hirachand in their assessment claimed a deduc tion of Rs.
931 lakhs.
K. Mitra, S. A. L. Narayan Rao and B. D. Sharma, for the respondent.
On November 14, 1946 the parties ap proached Tata Aircraft Ltd. who agreed to accept M s. Pokhraj Hirachand as purchasers of parachutes on the terms and companyditions originally agreed to between the assessee and that companypany.
1,87,000 had been proved to have been made to the assessee.
3,00,000 on November 13, 1946.
N. Shroff, for the appellant.
The details of this arrangement were companytained in a letter, dated October 31, 1946.
10 lakhs was to be deposited by the latter who were to receive a net profit share of 9 As.
681 of 1968.
The benefits if the companytract of purchase of parachute were transferred to the firm styled as Pokhraj Hirachand for a sum of Rs.
3,00,000 had escaped assessment.
Thereupon the assessee moved the Tribunal and the question of law was referred.
