COMMISSIONER OF INCOME-TAX vs S. ARUMUGHAM PILLAI — 1972 PTD 302

Citation: 1972 PTD 302

Court: Madras High Court

Year: 1968

Decision Date: 1968-12-13

Parties: COMMISSIONER OF INCOME-TAX vs S. ARUMUGHAM PILLAI

Headnotes

Case cited as 1972 PTD 302

Judgment Text

Court Name: Madras High Court Judge(s): K. Veeraswa mi, Ramaprasada Rao Title: COMMISSIONER OF INCOME-TAX vs S. ARUMUGHAM PILLAI Case No.: Tax (Reference No. 41 of 1965) Case No. 105 of 1965 Date of Judgment:1968-12-13 Reported As: 1972 PTD 302 Result: Question answered in the affirmative JUDGMENT JUDGMENT RAMAPRASADA RAO, J.--This reference under section 66(1) of the Indian Income-tax Act, 1922, on an application by the Department, arises out of an order of the Tribunal which accepted the contention of the assessee, that the share of profits received by him as partner of the firm, Erode Bleaching and Finishing Company, was not his real income, but was income which he was bound to share with other persons under an agreement therefor. The assessee is a partner of Jyothikrishnan & Company, Erode, which has two others as partners thereto. The assessee is entitled to a one third share of the profits in this firm. The assessee is also a partner in the firm, Erode Bleaching and Finishing Company, Erode, in which there are four others as partners. Jyothikrishna & Company, hereinafter referred to as "J" firm, found the wherewithal for the Erode Bleaching and Finishing Company, hereinafter called the "B" firm, and advanced moneys from time to time to provide a building and machinery for the "B" firm. Such advances amounted up to Rs. 25,000. This amount was treated, for mercantile purposes, as the capital of the assessee in the books of the "B" firm. There was an understanding…

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