COMMISSIONER OF INCOME-TAX, KERALA vs K. B. KALIKUTTY (DECEASED) AND — 1972 PTD 527

Citation: 1972 PTD 527

Court: Supreme Court of India

Year: 1971

Decision Date: 1971-12-31

Parties: COMMISSIONER OF INCOME-TAX, KERALA vs K. B. KALIKUTTY (DECEASED) AND JUDGMENT

Headnotes

Case cited as 1972 PTD 527

Judgment Text

Court Name: Supreme Court of India Judge(s): V. Ramaswa mi, A. N. Grover, J. C. Shah Title:COMMISSIONER OF INCOME-TAX, KERALA vs K. B. KALIKUTTY (DECEASED) AND JUDGMENT Reported As: 1972 PTD 527 Result: Appeal allowed Judgment JUDGMENT GROVER, J.---The sole question for determination in V appeal by special leave is whether on a true interpretation a construction of the second proviso to section 10(2)(vii) of the Income-tax Act, 1922, sale of the assets of an assessee effected for the purpose of closing down the business would be covered that proviso and would be assessable as profit. The assessee was running the business of plying buses in the name of Kumar Motor Service. During the assessee's previous year which was the year ending August 16, 1959, the buses h, been plied for part of the year but they were sold between August 16, 1958, and January 13, 1959. Two of the buses he been sold for Rs. 78,000 and the other four for Rs. 35,000, the total consideration received being Rs. 1,13,000. The assess claimed a payment of Rs. 2,000 as brokerage. The Income-tax Officer fixed a sum of Rs. 25,000. As the route value and held this amount to be a capital gain' assessable to tax. On the balance of Rs. 86,000 he worked out the profits In the following manner : Sale price of 6 busesRs. 86,000 Written down value of Rs. 36,712 six buses Rs. 49.288 The Income-tax Officer consequently assessed the sum Rs. 49,288 as profit under the second proviso to section 10(2)(vii) Before the…

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