KERALA vs TRAVANCORE SUGARS AND JUDGMENT Reported As — 1971 PTD 764

Citation: 1971 PTD 764

Court: Kerala High Court

Year: 1970

Decision Date: 1970-12-31

Parties: COMMISSIONER OF INCOME-TAX, KERALA vs TRAVANCORE SUGARS AND JUDGMENT

Headnotes

Result: question in the affirmative Judgment JUDGMENT RAGHAVAN, J.------This reference came before a Division Bench of this Court (M. And Madhavan Nair, J.) in August 1963 ; and this Court answered the question referred "Whether, on the facts and in the circumstances of the case, the payment of Rs.

Judgment Text

Court Name: Kerala High Court Judge(s): K. K. Mathew, T. C. Raghavan, M. U. Isaac Title:COMMISSIONER OF INCOME-TAX, KERALA vs TRAVANCORE SUGARS AND JUDGMENT Reported As: 1971 PTD 764 Result: question in the affirmative Judgment JUDGMENT RAGHAVAN, J.------This reference came before a Division Bench of this Court (M. S. Menon, C. J. And Madhavan Nair, J.) in August 1963 ; and this Court answered the question referred "Whether, on the facts and in the circumstances of the case, the payment of Rs. 42,480 by the assessee to the Travancore Government under the agreements dated June 18, 1937, and January 28, 1947, was allowable under section 10 of the Income-- tax Act ?" in the negative against the assessee- company. The company took up the matter before the Supreme Court ; and the Supreme Court allowed the appeal. The Court, relying mainly on the preamble to the agreement between the company and the Government of Travancore which contained an expression that the payment was "also in consideration" held that the expenditure was not of a revenue nature, but of a capital nature, in other words, towards the unpaid portion of the purchase price. In view of that, this Court did not consider the other contention raised by the revenue that the agreement showed only a payment by way of division of earned profits of a common venture between the company and the Government. The Supreme Court held that the payment was not in the nature of a capital payment, but was in the nature of a revenue…

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