RESPONDENT:

RAJA BENOY KUMAR SAHAS ROY

ACT:
Income Tax-Exemption-Income from sale of forest trees, if and when
agricultural income-"Agriculture", Meaning of -Indian Income-tax Act (XI Of
1922), SS. 2(1), 4(3)(viii).

RESPONDENT:
SHRI SITALDAS TIRATHDAS
ACT:
Income-tax--Maintenance payable to wife and children under
decree--Whether deductible from total income.
HEADNOTE:
A consent decree was passed against the assessee awarding maintenance to
his wife and children. The decree did not create any charge upon the income
of the assessee. The assessee claimed in the assessment of income tax
deduction of the amount paid under the decree from his total income.
Held, that the assessee was not entitled to the deduction.
Where by the obligation income was diverted by an overriding title before it
reached the assessee, it was deductible; but where the income was required to
be applied to discharge an obligation after such income reached the assessee,
it was not deductible. The true test was whether the amount sought to be
deducted, in truth, never reached the assessee as his income. In the present
case, the wife and children of the assessee received a portion of the income of
the assessee, after the assessee had received the income as his own.

RESPONDENT:
COMMISSIONER OF INCOME TAX, CENTRAL CALCUTTA
ACT:
Income-tax Act, 1922, ss. 10(1) and 10(2)(xv)-Disputed and unpaid sales tax
whether a permissible deduction-Liability accrues in Year of sale and not when

sales tax demand is quantified or finally determined-Where mercantile system

of accounting is adopted amount is deductible when liability accrues and the
time when, liability is discharged is irrelevant-Position is not changed even
when entries in books of account are made at a later date.

RESPONDENT:
COMMISSIONER OF INCOME TAX, M.P. BHOPAL AND ANR.
ACT:
Income Tax Act 1961, ss. 40A (7), 36 (1) (v) and 37(1)
Deduction - Payment of Gratuity - Whether deduction can be claimed under
any other provision under the head "business or profession" without complying
with the requirements of s. 40A (7) (b) - Distinction between an actual liability
in praesenti and a liability de futuro explained.
Interpretation of statutes - Taxing statutes Principle of reasonable construction - Applicability of Words and Phrases - "Provision" - Meaning of.

RESPONDENT:
C.I.T., WEST BENGAL
ACT:
Bengal
Finance (Sales Tax) Act, 1941-Whether
"Auctioneer"
covered
by expression "Dealer' in explanation
2 of Sec.
2(c)-Definition of the word "Dealer" whether ultra vires the
power of the State legislature under Entry 48, List
II,
Schedule VII of Govt. of India Act, 1935-Assessee company
acting as autioneer-Amount realised as sales tax in auction
sales and credited separately under Sales Tax Collection
Account, whether part .,of appellant's income.

HEADNOTE:
The appellant assessee is a private limited Company dealing
in furniture and also acts as an auctioneer. In respect of

the sales effected by the appellant as auctioneer, it

realised, during the year in question, in addition to
the
commission, Rs. 32,986/- as sales tax. This
amount
was
credited separately in the books under the Sales
Tax
Collection Account. This sum was neither paid over to the
ex-chequer nor was it refunded to the persons from it had
been collected. For the year in question, the I.T.O.
held
that the sum of Rs. 32,986/- was a part of the
appellant's
income
of the same nature as the commission received by it
on the auction sales. The appellant relying on the decision
of the Calcutta High Court, [1961] 12 S.T.C. 535 contended
that as the State Government had legislative competence to
include
"auctioneer" in the definition of "dealer" in the
Bengal Finance (Sales Tax) Act, 1941, the amount in question
was not a trade receipt liable to tax under Income Tax Act.
The Appellate
Asstt. Commissioner and the Appellate
Tribunal held
in favour of the appellant.
However, a
reference under Sec. 66(1) of the Indian Income Tax Act, was
answered by the High Court against the appellant.
Two
questions were
posed before this Court : (1) Whether
the
decision of the Calcutta High Court in [1961] 12 S.T.C. 535
was correct and (2) whether the answer to the reference by
the High Court was right ?