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1,778 | 787778169cb0436d9dda8d857243de79 | In the Finance Act of 1955 a provision was made to allow a development rebate of 25% of the cost of all new plant and machinery installed for business purposes instead of the then existing initial depreciation allowance of 20%. | 6ANALYSIS
|
1,778 | 5845e396c1254dbebe15aa264e3095ef | It would thus be seen that by way of an incentive for installation of new machinery and plants initial depreciation allowance of 20% was replaced by a develop- ment'rebate of 25%. | 6ANALYSIS
|
1,778 | bfbf0066765b40db9051c08783e2f43d | But it was, like grant of export rebate by way of incentive to make more exports, in the nature of an incentive for setting up new machineries and plants. | 6ANALYSIS
|
1,778 | 4a2004898956419f87dc4d4bdb1d490d | We do not find any warrant for accepting the contention of Mr. Rajgopal that the initial depreciation or the develop- ment rebate was allowed as 'an extra deductible allowance of business expenses in the year of installation of new machin- ery for meeting the ever increasing costs of its replacement in future years. | 6ANALYSIS
|
1,778 | c2eefbc7faeb43c49863115c1252050c | In our opinion it was meant merely to reduce the tax liability of the assessee in order to give him an incentive to instal new machineries or plants. | 6ANALYSIS
|
1,778 | fd9f06c71f0642d1be47ba2bc3d50743 |
The Gujarat High Court in the case of Viramgam Mills Co.
Ltd. (supra) was concerned with the question as to whether the normal depreciation reserve of .'the Company could be taken to be the accumulations of past profits within the meaning of the proviso to section 23A of the 1922 Act as it stood at the relevant time. | 4PRE_RELIED
|
1,778 | 3c23dbf217174450a17e6e72224c7b82 | It held that it could not form part of the accumulated past profits as in the words of Wixon (vide Wixon's Accounts Hand Book) it was "the estimat- ed 645 expiration of asset value" or as observed by Paton in his Accountants' Hand Book, Third edition it is an out-of-pocket cost as any other cost. | 4PRE_RELIED
|
1,778 | 3e279adb846140929fc178c28d624966 | Says the learned author in the above book at p. 746 thus: "There is still widespread misapprehension as to the precise significance of the depreciation charge. | 4PRE_RELIED
|
1,778 | 0afc210293824495b4571b0f8e7b6c31 | It is often deemed a more or less imagi- nary and hypothetical :element, and is sharply contrasted with the regular "out-of-pocket" oper- ating costs. | 4PRE_RELIED
|
1,778 | 8ad4d8ee9c1e42b7b9d2cd166f697e11 | As a matter of fact there is nothing at all imaginary about depreciation as a cost of business operation and at bottom it is just as much 'an out-of-pocket cost as any other. | 4PRE_RELIED
|
1,778 | b6527cab23b54e32a63bea25699afb6e | The deprecia- tion charge is merely the periodic operating aspect of fixed-asset costs, and there is no doubt as to the reality of such costs. | 4PRE_RELIED
|
1,778 | 08f146cddab44ac0aa2899306e7f9a37 | Far from being a non-out-of pocket charge depreciation represents the extreme example of prepayment." | 4PRE_RELIED
|
1,778 | a2594652441d416697a034540dc6592b |
Mr. S.T. Desai, learned counsel for the Revenue drew our attention to the decision of the Calcutta High Court in Commissioner of Income tax. | 7ARG_RESPONDENT
|
1,778 | 6c89db269e9446efac4f9636e90447cd | Calcutta v. Sri Bibhuti Bhusan Dutt(1) and submitted that it has taken a view different from the one taken by the Gujarat High Court even in regard to the nature of normal 'depreciation allowance. | 7ARG_RESPONDENT
|
1,778 | 2aecc461b62c4da3bfd034f2610ae2fc | The Calcut- ta case seems to be one of a property-holding company, the profits of which were assessable under section 9 wherein the question of depreciation was not relevant. | 6ANALYSIS
|
1,778 | e0b2b2764de343d5a7ab4c421ef58e1b | It is not neces- sary for us to examine in this case the exact nature of the normal depreciation allowance and whether it is deductible from the profits of a person while determining his commer- cial profits. | 6ANALYSIS
|
1,778 | db3abcd5346e45bd92657f6d902e6c02 | The view expressed by the Gujarat High Court seems to be reasonably plausible and correct and for the purposes of this case we shall assume it to be so. | 6ANALYSIS
|
1,778 | 564137060a12498597613e9f2907ff06 | Yet, we do not feel persuaded to accept the argument of the assessee and equate the initial depreciation or the develop- ment rebate with the normal depreciation. | 6ANALYSIS
|
1,778 | 0844128b1f824fd48e8c37f0fba53c18 | In our opinion such an allowance is in no sense a deductible item of cost or expenditure in the process of settlement of the commer- cial profits. | 6ANALYSIS
|
1,778 | f60fe2a616fe4a12ba9868d702b20d5b | Although it does not form part of the assessable profits, undoubtedly it does form part of the commercial profits. | 6ANALYSIS
|
1,778 | 35c13bfa7616420a935d6d38bd11cb86 |
Tea Estate India Pvt. Ltd. v. Commissioner of Income-tax, West Bengal 11 (and vice versa)(2) one of us (Khanna, J.) delivering the judgment on behalf of the Court has interpreted the, expression "accumulated profits" occur- ring in clause (c) of section '2(6A) of the 1922 Act to include the amount of development rebate in the commercial sense. | 4PRE_RELIED
|
1,778 | 5dd1fc5359134f11bfd18cd41ff7fdb6 | It has been stated at page 794: "The acceptance of the contention would necessarily postulate reading in section 2(6A)(c) the words "accumulated profits as are liable to be taxed under the Act". | 4PRE_RELIED
|
1,778 | f86e030552d54bdda5bc86d89bee061a | The words "as are liable to be taxed under the Act" are not there in the definition and it would not, in our opinion, be permissible to so construe the clause as if those words were a part of that clause. | 6ANALYSIS
|
1,778 | 452b4564df954d02a80a30b8cb08432c | There is also nothing in the language (1) 48 I.T.R. 233. (2) 103 I.T.R. 785.
646 | 6ANALYSIS
|
1,778 | 07590a0fb1504b56bb0d4797a9526d49 | Or Context of that clause as would warrant such a construction. | 6ANALYSIS
|
1,778 | 94a266ab60f94f45a71c6bcc8bdc1b23 | Accumulated profits would retain their character as such even though a part of them were not taxed as profits under the Act."
| 6ANALYSIS
|
1,778 | 2b9fdee393394422a31cf193e816727b | The purpose of section 2 (6A) of the 1922 Act corresponding to section 2(22) of the 1961 Act is to include within the term "dividend" for the purpose of taxation certain distri- butions or payments of certain items of money or the like as deemed dividend for the purpose of taxation. | 6ANALYSIS
|
1,778 | f274435d0abf47ae9cf59c5a599bd738 | Under clause (e) an advance or loan or money to a shareholder by a pri- vate Company has been directed to be treated as dividend to the extent to which the Company possessed accumulated profits. | 6ANALYSIS
|
1,778 | 04271f9d8e9c423188722845c242a571 | The advance or the loan, by a legal fiction, is to resemble the actual dividend. | 6ANALYSIS
|
1,778 | c2cf5882315f44fb817840f383d661c9 | For the purpose of distribu- tion of the dividend the amount of development rebate could form part of the profits of the Company; a fortiori, it would be so far the purposes of clause (e) also. | 6ANALYSIS
|
1,778 | d5422b2dbd04404e8e83ab225ea3eff2 | During the course of the arguments of this appeal, our attention was directed to a new facet of the question under consideration and that is this. | 6ANALYSIS
|
1,778 | 856c13e5db6f401dafdf802463bcd86d | In clauses (a) to (d) of section 2(6A) of the 1922-Act so also in the corresponding clauses of section 2(22) of the 1961-Act the expression "accumulated profits" is qualified by the expression "whether capitalised or not". | 6ANALYSIS
|
1,778 | 2055708b51634e5c9aa267a3ecf4315e | But the latter phrase is conspicuously absent in clause (e). | 6ANALYSIS
|
1,778 | 4216dfb7c5df4c56a31dabc5f72adfc8 | What is the purpose of this difference in the phraseology of the various clauses of sub-section (6A) ? | 6ANALYSIS
|
1,778 | e52f1c3476744d738d308b68df11e1f2 | The reason is -not far to seek and yet not helpful to the assessee in this case. | 6ANALYSIS
|
1,778 | 8b9879378fee45909363428d95ad058f | The profits of a Company can be capitalised in accord- ance with the Articles of Association and the law. | 6ANALYSIS
|
1,778 | 78d800dffd4e46a7a797dddc1775ad21 | On the capitalisation of the profits they cease to be profits in the hands of the Company. | 6ANALYSIS
|
1,778 | 3d703a7281424351be573bd5e60e3e41 | The nature of the asset is changed although it does not make any difference in the total assets of the Company. | 6ANALYSIS
|
1,778 | 2c15286b60844944bee82042b996c42d | But profits stand transmuted and transformed into capital. | 6ANALYSIS
|
1,778 | 3270a0cee16842c4b089e89d2119dbef | The most common example of capitalisation of profits is by issuance of bonus shares to the shareholders. | 6ANALYSIS
|
1,778 | a20ee0803d22440db5dd5db48ee024f5 | Clause (a) to (d) were intended by the Legislature to cover the cases of accumulated profits even though they may be capitalised. | 6ANALYSIS
|
1,778 | aab8110c5dec4020a9af3a30b5f2ee0a | But the Legislature did not intend to rope in the capitalised profits in clause (e). | 6ANALYSIS
|
1,778 | 843f1ce62dbc41278570c98b619baa5d | We may add that though under clause (b) distribution by a Company of debentures, debenture stock or deposit certifi- cates in any form in lieu of capitalised profits is to be deemed dividend within the meaning of sub-section (6A), mere distribution of bonus shares after capitalising the accumu- lated profits, unless the distribution entails the release by the Company to its shareholders of any part of the assets of the Company is not to be a deemed dividend. | 6ANALYSIS
|
1,778 | 56f924897fc0400dba5a541a3f20b350 | Even under the 1961 Act distribution of bonus shares to the equity shareholders after capitalising the profits in accordance with law is not to be a deemed dividend although distribu- tion of such shares to preference shareholders is. | 6ANALYSIS
|
1,778 | ea19863e33304880a39a7d1cc36a32ba | It is thus clear that if money is paid to a shareholder of a private company by way of advance or loan after the accumu- lated profits have been capitalised in accordance with the law and the Articles of Association then such payment, although it may represent a part of the assets of the Compa- ny or otherwise, cannot be co-related to the capitalised profits of the Company. | 6ANALYSIS
|
1,778 | 1b3ed5ba467841c0bd99902c4d5c9b97 | To the extent the profits have been capitalised the Company cannot be said to possess any accu- mulated profits. | 6ANALYSIS
|
1,778 | 30b12f053620450587b50e9cff29dea5 | 647 But the Obvious difficulty in the way of the appellant is that the accumulated profits of the Company in the year in question were never capitalised. | 6ANALYSIS
|
1,778 | 57dfefc78d264b05a372fda24da835e5 | Mere transferring the sum of Rs. 2,36,470/- by debiting it to the profit and loss account to the development reserve account did not amount to the capitalisation of profits. | 6ANALYSIS
|
1,778 | 164e7f6f389f4daa9df161d857938773 | The nature of the assets in the hands of the Company did not change. | 6ANALYSIS
|
1,778 | 3a3c91daf5554227aa74e30349f87d22 | It remained profits in the hands of the Company. | 6ANALYSIS
|
1,778 | 19d64e2171244af28b91c47d4ce4a9bc |
According to the Dictionary of English Law by Earl' Jowitt, Vol. 1 "capitalisation" means "the conversion of profits or income into. capital, e.g., by resolution of a company". | 6ANALYSIS
|
1,778 | 1b1de2620dce418ebbe69b09aa760b0c | Buckley on the Companies Acts, thirteenth edi- tion, has pointed out at page 907 "Profits carried to re- serve do not cease to be profits unless and until they are effectually capitalised". | 6ANALYSIS
|
1,778 | 680fdb8c87ac4e51972429153c28d8ab | Says the learned author at page 912 after referring to Article 128 corresponding to Regula- tion 96 of Table "A" of the Indian Companies Act: "A company may, if its constitution so al- lows, capitalize profits, instead of dividing them, by applying them in paying up unissued shares, or debentures or other securities, and issuing such shares or securities as fully paid to its members, thereby transferring the sum capitalized from profit and loss or reserve account to share or loan capital account." | 5STA
|
1,778 | 5b00f90929204dabb64c7e7e67092f95 | To the same effect is the statement of the law to be found in Palmer's Company Law, twenty-first edition page 673. | 6ANALYSIS
|
1,778 | 045676f6e9f9431b958c8abb0ef7eae6 | The "capitalisation of profits". says the learned author, means "that profits which otherwise are available for distribution among the shareholders are not divided among them in cash, but that the shareholders are allotted further shares--or debentures--which are paid up wholly or in part out of' those profits. | 6ANALYSIS
|
1,778 | 59aec9123efa44b08901071800bb1449 | The amount paid by the company out of its divisible profits on account of these newly issued shares is known as the bonus, and the shares are referred to as bonus shares." | 6ANALYSIS
|
1,778 | d2e4a9a4436149df990622b4bc8ca845 | Lord Herscheil in the case of Ann Bouch and Wil- liam Bouch v. William Bouch Sprou(1) was considering as to what was the nature and substance of the transaction in question in that case. | 4PRE_RELIED
|
1,778 | 1c0a16cb47604f5abe0e3e1b9ef313ff | The learned and the noble Lord said at page 398: "I think we must look both at the 'substance and form of the transaction ........ | 4PRE_RELIED
|
1,778 | 6b7ac76f68da4d8c9f24ddb18cc07a4b | And it was obviously contemplated, and was, I think, certain that no money would, in fact, pass from the company to the shareholders, but that the entire sum would remain in their hands as paid-up capi- tal." | 4PRE_RELIED
|
1,778 | 85ebab6e969e4f52ae2931e4d351f84a | And finally 'it was said at page 399: "I cannot, therefore, avoid the conclusion that the substance of the whole transaction was, and was intended to be, to convert the undivided profits into paid-up capital upon newly-creat- ed shares." | 4PRE_RELIED
|
1,778 | 031d6ce70eee4ee3871d10ea051e2827 |
The Madras High Court has pointed out in Commissioner Income-tax, Madras v.K. Srinivasan and others(2), to quote the placitum only: "For the purposes of section 2(6A)(e) of the Income tax Act, 1922, "accumulated profits" include general reserves.
(1) 12 Appeal Cases, 385.
(2) 50 I.T.R. 788.
648 Unless the profit is capitalised in some form or other mere transfer of the profits to any reserve account will not take away from profits the charac- ter of accumulated profits."
In Sheth Haridas Achratlal v. Commissioner of Income-tax, Bombay North, Kutch and Saurashtra, Baroda(1)--Chief Justice Chagla delivering the judgment on behalf of the Bench of the Bombay High Court said at page 690: "But when we compare the language used by the Legislature in sub-clauses (a), (b) and (d) and when we note the omission of the qualifying words in sub-clause (c) then it is clear that the Legislature advisedly did not intend to subject to tax those accumulated profits which had been capitalised." | 4PRE_RELIED
|
1,778 | e7910315a21d4465bf2b7f6854d0258d | It appears that the ex- pression "capitalised or not": was added in clause (c) after this decision.
| 6ANALYSIS
|
1,778 | b99fa23dd6c14d6cb125bea5269de61d | For the reasons stated above, we hold that the develop- ment rebate reserve created by the Company by duly charging the amount of profit and loss account although liable as a deduction under the 1922Act, constituted accumulated profits of the Company Within the meaning of section 2(6A)(e). | 2RATIO
|
1,778 | 8a9dd40310dd4f29b0d2396746268c3c | We accordingly affirm the decision of the High Court and dis- miss this appeal but in the circumstances make no orders as to costs. | 1RPC
|
1,778 | e821013efb4140abbbd5ea01e469d728 |
V.P.S. Appeal dismissed. | 1RPC
|
1,778 | 8ff2ff87069b4ec3838af3ad032c4700 |
(2) 27 I.T.R. 684.
649 | 0NONE
|
1,737 | 88585fe897c245a08fd02d51e306929b | PETITIONER:
SUKHA AND OTHERS
Vs.
RESPONDENT:
THE STATE OF RAJASTHAN. | 12PREAMBLE
|
1,737 | 14df31ce64074371944ec2a750519200 |
DATE OF JUDGMENT:
05/04/1956
BENCH: | 12PREAMBLE
|
1,737 | 1f3a288415724c26a6240ed71a75acbb |
BOSE, VIVIAN | 12PREAMBLE
|
1,737 | dfd09272f110474590a67aaec5cf374d |
BENCH:
BOSE, VIVIAN
JAGANNADHADAS, B.
AIYAR, N. CHANDRASEKHARA
CITATION: 1956 SCR 288
1956 AIR 513
ACT:
Unlawful Assembly-"Common intention" and "Common object"
-Distinction-Duty of a Court of fact-Indian Penal Code (Act
XLV of 1860), ss. 34,149.
HEADNOTE:
Common intention required by s. 34 of the Indian Penal Code
and common object set out under s. 149, though they
sometimes overlap, are used in different senses and should
be kept distinct. | 12PREAMBLE
|
1,737 | ccabee648bf74eb3a3faed2e1cf6370f | In a case under s. 149 there need not be
a prior concert and meeting of minds | 12PREAMBLE
|
1,737 | b83e05091ad540f3894be95ed49ed5bf | , it is enough that each
has the same object in view and their number is five or more
and they act as an assembly to achieve that object.
| 12PREAMBLE
|
1,737 | 8fab10d1a50e47a994054df0ff0be9fb | When a crowd assembles and there is an uproar and people are
killed and injured, it is only natural for others to rush to
the scene with whatever arms they can snatch. | 12PREAMBLE
|
1,737 | e0dd02144b2744529a114c4e1f170bbb | Some may have
an unlawful motive but others may not, and in such
circumstances it is impossible to say that they were all
motivated by a common intention with prior concert. | 12PREAMBLE
|
1,737 | ad2fe6804d7d42dc9cd13e030c529fc0 | What a
court of fact should do in such a case is to find from the
evidence which of them individually had an unlawful object
in view, or having originally a lawful object in view deve-
loped it later on into an unlawful one and if it finds that
there were five or more such persons who acted together
there would be an unlawful assembly.
| 12PREAMBLE
|
1,737 | 6d13d4a27de541b09116d0e7053dff8f | Consequently, | 12PREAMBLE
|
1,737 | 156d0589b9bf4e2dae4e05397bdecc80 | in a case where there were circumstances from
which the courts of fact could deduce that an unlawful
object developed with more than five to share it after the
fighting started and they were satisfied that it did, there
was no reason why their concurrent decisions should be set
aside.
| 12PREAMBLE
|
1,737 | 8bbfc305abb04fd9b68cb86d01e8589b | This court will be slow to entertain a question of prejudice
when details are not furnished; also, the fact that the
objection was not taken at an early stage will be taken into
account.
JUDGMENT: | 12PREAMBLE
|
1,737 | 21a052d5cde04e45b85345d91adc0b73 | CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 133 of 1955. | 0NONE
|
1,737 | 21d59a6679e04396b301a95f6b970083 |
Appeal by special leave from the judgment and order dated the 10th January 1955 of the High Court of Judicature at Jodhpur in Criminal Appeals Nos. 57 & 83 of 1953 arising out of the judgment and order dated the 26th May 1953 of the Court of 289 Sessions Judge at Merta in Criminal Original Case No. 1 of 1952. | 11FAC
|
1,737 | 0fd4fe5d8e6e49f1bc17b2cb445d6a34 |
Jai Gopal Sethi, K. R. Krishnaswami and K. R. Chaudhry for the appellants. | 11FAC
|
1,737 | e3a617db55ce43069595c978225c46be |
Porus A. Mehta and P. G. Gokhale, for the respondent. | 11FAC
|
1,737 | df8225afeee34cb4bbe8c99301d34f31 |
1956. | 11FAC
|
1,737 | 239a50498ae44470bb3be567fb61e6c6 | April 5. | 11FAC
|
1,737 | 19c7fd4a48d0442b9cdd9e9667fd2c0e | The Judgment of the Court was delivered by BOSE | 11FAC
|
1,737 | 6244395e199041efb28ec3990a0ccd18 | J.-Four | 11FAC
|
1,737 | 4ce00169855046768733796ef0bdfc42 | persons were killed about 11 p.m. on the night of the 21st July 1951 and a number of others injured. | 11FAC
|
1,737 | 25c010bf6cff4377851ed9c2c7eaa121 | This was said to be the result of a riot that occurred in the village Dhankoli. | 11FAC
|
1,737 | d29ac4f88c4840289d6764154157f136 | Thirty six persons were committed for trial. | 11FAC
|
1,737 | a899ffbe70c4486ebc55f0aa370c32bb | Of these, two died during the course of the proceedings. | 11FAC
|
1,737 | 1188e28d87e94f76a9e40925334b957f | The remainder were all charged under section 325/149 of the Indian Penal Code and eleven were also charged under section 302/149. | 11FAC
|
1,737 | e3829f5a05084206ab89b75a441ca166 | The learned Sessions Judge acquitted twenty five of the charge under section 325/149 and convicted nine. | 11FAC
|
1,737 | 8b66336374944be081c57f937cc76832 | He acquitted all the eleven who were charged under section 302/149 but convicted nine of them under section 325/149. | 11FAC
|
1,737 | 0e5184ee001248e4a03376b4d2b7046b |
The State did not appeal against the acquittals of the twenty five under section 325/149 nor did it appeal against the acquittals of two of the eleven who were charged under section 302/149 but it appealed against the acquittals of the remaining nine who had been convicted under section 325/149. | 11FAC
|
1,737 | 3acb9191bbee4f098477fd5ea8883b07 | These nine convicts also appealed. | 11FAC
|
1,737 | 2061f31a7e3042da99ca09f174cfd0fa | The High Court therefore had two appeals before it, one against the acquittals of nine persons under section 302/149 and the other by the same persons against their convictions under section 325/149. | 11FAC
|
1,737 | c4ac381220dc4b1ba5ee9fac6df7d6fe | The High Court dismissed the appeal of the convicts and allowed that of the State. | 11FAC
|
1,737 | c82595a9c61746648838104f40992de9 | The convictions of these nine persons were accordingly altered to ones under section 302/149 of the Indian Penal Code and the lesser sentence of transportation was given to each. | 11FAC
|
1,737 | 1c768891c48d44b5b1c903cc602f6814 |
It is admitted on both sides that there was bad 290 blood in the village Dhankoli between a caste known as Baories on one side and three other castes of the village namely, Jats, Dhobis and Khaties on the other. | 11FAC
|
1,737 | bfee0ed2734642fc97f49bf525bed82e |
The case for the prosecution is that this was due to a dispute over a field that belonged to some of the Jats. | 11FAC
|