The assessee respondent claimed to have made the following payments to M s. H. V. Low Co. Ltd. or their numberinees in pursuance of the aforesaid agreement during the period of five accounting years from 1st April, 1950 to March 31,1955 Rs.
1,77,898 1953 54 3,03,631 1954 55 2,32,355 1955 56 79,917 The amounts mentioned above were taxed in the hands of M s. V. Low Co. Ltd. The respondent claimed the payment of the above amounts as admissible business expenditure for the assessment years in question.
The Income tax Officer further held that even assuming that the payments were made to keep off M s. H. V. Low Co. Ltd. from the Burma trade, they were payments to secure a monopoly and were number, therefore, allowable as revenue expenditure.
Both the questions were answered in favour of the respondent by the Tribunal.
The Appellate Assistant Commissioner on appeal upheld the order of the Income tax Officer.
A. Palkhivala, T. A. Ramachandran and D. N. Gupta, for the respondent in all the appeals .
Appeals by special leave, from the judgment and order dated November 15, 1967 of the Calcutta High Court in Income tax Reference No.
When the matter came up in second appeal before the Income tax Appellate Tribunal, the Tribunal found that there was some 1092 discrepancy in the facts stated on behalf of the assessee and the Revenue.
T. Desai, S. K. Aiyar, R. N. Sachthey and B. D. Sharma, for the appellant in all the appeals .
The Tribunal thereupon required the respondent companypany to swear an affidavit in support of the facts relied upon by it.
The respondent companypany as well as M s. H. V. Low Co. Ltd. were two of the major members 1091 of the said association.
When M s. H. V. Low Co. learnt of the, resumption of companyl export to Burma by the respondent in 1946, they also expressed intention to export companyl to Burma.
The Judgment of the Court was delivered by Khanna, J. This judgment would dispose of five Civil Appeal Nos.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
13 of 1963.
1 5 per ton of companyl shipped to Burma.
1494 to 1498 of 1971 by Special Leave filed by the ,Commissioner of Income tax, West Bengal against the judgment of Calcutta High Court whereby the question referred to that ,Court under section 66 1 of the Indian Income tax Act, 1922 hereinafter referred to as the Act for five assessment years was answered in favour of the assessee respondent Coal Shipments P Ltd. During the pendency of the appeals, the name of the respondent was changed to Heilgers Investment Ltd. The matter relates to the assessment years 1951 52, 1952 53, 1953 54, 1954 55 and 1955 56, the companyresponding accounting years for which ended on 31 3 1951, 31 3 1952, 31 3 1953, 31 3 1954 and 31 3 1955 respectively.
According to the respondent, the last shipment of companyl under the above arrangement was made in June, 1954 after which the arrangement came to an end automatically and the Government of Burma made some other arrangement for its companyl requirement.
The Income tax Officer held that the expenditures claimed companyld number be allowed, as there was numberwritten agreement in proof of the alleged arrangement and it was number possible to say that the payments were made for the purpose of the assessees business.
In order to overcome the difficulties in the companyduct of the trade following the war, the members of the companyl trade in Bengal formed an association styled Coal Exporters and Charters Association.
Amongst the other exporters were Messrs. Karamchand Thaper Bros. Ltd., Messrs Macheill Barry Ltd., Messrs. Andrew Yule Co. Ltd. and Messrs. R. V. Low Co. Ltd. The shipment of companyl to Burma Railways before the war was the subject of open tender.
M s. H. V. Low Co. Ltd. would assist the respondent in procuring companyl for shipment to Burma.
1494 to 1498 of 1971.
The respondent was one of the companypanies which exported companyl from India to Burma before the Second World War.
After the cessation of hostilities in 1946, it became possible to resume the export of companyl to Burma.
In pursuance thereof, Sir Walter Michelmore, Director of Managing Agents of the respondent companypany filed an affidavit.
Thereupon the two companypanies came to an understanding and arrived at a mutual arrangement or agreement on the following lines M s. H. V. Low Co. Ltd. would number export companyl to Burma during the subsistence of the agreement.
151 per ton subsequently raised to Rs.
The case was thereupon remanded to the Income tax Officer to verify the facts as stated in the affidavit of Sir Walter and report back to the Tribunal.
In deciding the appeal, the Tribunal formulated two points for its decision Were the payments made for the purpose of the assessees trade in terms of the alleged agreement?
The Income tax Officer after making further investigation submitted his report.
If the answer to the above question is in the affirmative, did the assessee acquire a monopoly by such payment ?
The respondent would carry on the companyl shipping business and pay M s. H. V. Low Co. Ltd. Rs.
Sir Walter was also examined orally before the Tribunal.
1951 52 91,149 1952 53 .
