judgement:
Civil Appeal No. 774 of 1967.
Appeal by special leave from the judgment and order dated February 6, 1970 of the Madhya Pradesh High Court in Second Appeal No. 327 of 1963.
D. N. Mukherjee, for the appellant.
Janardan Sharma, for the respondents.
The Judgment of the Court was delivered by Mitter, J.
This is an appeal by special leave from a judgment of the Madhya Pradesh High Court dated 6th February 1967 dismissing a Second Appeal by the appellant before this Court against 726 a decree passed by the Additional District Judge of Ratlam for ejectment of the appellant from a house mortgaged by the predecessor in interest of the appellant to one Kesharimal for Rs. 3, 1 00 and further decreeing a claim for arrears of rent amounting to Rs. 731 35 and mesne profits at the rate of Rs. 20 per month until eviction.
The relevant facts are as follows.
On July 29, 1945 Mathuralal, predecessor in interest of the appellant, mortgaged his house in Ratlam to Kesharimal for a sum of Rs. 3,100 with possession.
The deed of mortgage contained the following terms : 1.
That interest would run on Rs. 3, 100 at Rs. 0 1 0 0 per cent per mensem till realization.
The period of redemption would be two years.
During the period of mortgage "the tenant as may be shall execute the rent notes in favour of the mortgagee and whatever rent shall be realised will be credited in lieu of interest and it the amount of rent shall exceed the amount of interest, the difference shall be deducted from the original sum due,, but if the amount of interest shall exceed the amount of interest the difference shall be deducted from the original sum due.
" But if the amount of interest shall exceed the amount of rent, then the mortgagor shall pay it.
Notwithstanding any vacancy during the period of the mortgage the rent would continue.
During the period.
of the mortgage an account of the rent and interest shall be settled after every six months.
The mortgagor undertook to keep the house in repairs during the period of the mortgage and in default of repairs by him the mortgagee was to be entitled to execute the necessary repairs and add the cost to his dues.
"The burden of the mortgage money shall be on the mortgaged house.
In case the amount is not realised from the house, the moragagee shall have a right to take steps to realise his money" from the mortgagor and his property of every kind.
On the same day the mortgagor executed another document in favour of the mortgagee reciting that his house in Ratlam was mortgaged with possession to the creditor who was "having its possession" and the mortgagor had taken the same on rent at Rs. 20 per month on the following terms : 1.
The executant would pay the rent every month regularly and in default of payment of two months ' rent, the mortgagee would be entitled to get him evicted.
727 2.
The executant would white wash and repair the house and keep it in good condition.
Kesharimal would be entitled to increase or decrease the rent.
The executant would vacate the house whenever asked to do so. 5.
The executant would hand over possession of the house in,the same condition in which he had received it.
Kesharimal filed a suit on his mortgage in 1954 and a preliminary decree for sale for the amount of Rs. 5,637 6 0 besides interest at, the rate of Rs. 0 10 0 per cent per mensem for six months.
on the sum of Rs. 3,600 was duly passed.
The defendant was, directed to pay the full amount of the decree before the 24th May 1955 and in case of his doing so the property was to be released from the mortgage and the plaintiffs were to hand over all the documents which they had in their possession, but in case of failure to pay the plaintiffs would be entitled to file an application for the execution of the decree and get the property auctioned; and in case of non satisfaction of the decree 'by the sale, the plaintiffs were to be at liberty to recover the balance of the decretal claim by a personal decree against the defendant.
It appears that Kesharimal had died during the pendency of the suit and his legal representatives were brought on record and the preliminary decree passed in their favour.
Whatever be the reason no application for a final decree for sale of the property was made within the period fixed under the Limitation Act.
The application for this purpose made by the executors to the estate of Kesharimal was dismissed on July 29, 1960 as barred by limitation.
On December 27, 1960 the said executors filed a suit for ejectment against the appellant alleging that the rent for the premises had remained unpaid from September 29, 1957 till November 28, 1960.
An amount of Rs. 731 75 was arrived at by totalling the rent for the period mentioned and mesne profits from 29th November 1960 to 26th December 1960 at the same rate and incidental charges and expenses and deducting therefrom the rent for two months which was barred by the lapse of time the plaintiffs asked for a decree for ejectment and further mesne profits.
The trial Judge dismissed the suit.
But on appeal this was set aside and the plaintiffs claim allowed in full.
The High Court in Second Appeal maintained the decree of the appellate court.
The points urged by counsel for the appellant before us were 1.
The rent note executed simultaneously with the mortgage was a mere device to secure payment of interest and did not record 728 an independent transaction.
Further it did not create any relationship of landlord and tenant.
The plaintiffs ' right as mortgagee merged in the decree and ,execution thereof being 'barred by the laws of limitation the plaintiffs had lost all their rights.
The mortgage being extinguished the mortgagor could not bring a suit for redemption.
Before examining the contentions urged we propose to note the substance of the two documents and what the parties sought to achieve thereby.
It is, clear that the mortgage was with possession of the house and that the mortgagee wanted to make sure of Rs. 20 per month irrespective of the fact as to whether the mortgagor or some other person occupied the house and notwithstanding any vacancy during the period of the mortgage.
The sum of Rs. 20 per month which the mortgagee wanted to ensure payment of every month exceeded the interest stipulated for by Rs. 0 10 0 per month.
There was to be no decrease in this amount even if the mortgagor were to repay a portion of the principal.
The mortgagee had further the right to increase or decrease the rent and the mortgagor covenanted to vacate the property whenever the mortgagee asked for possession.
In other words if the mortgagee chose to go into possession himself, the mortgagor would be entitled to have Rs. 20 p.m. credited towards the dues on the mortgage so long as he continued in possession.
Even during the period of redemption when the mortgagee could not have sued for the mortgage money he still had a right to evict the mortgagor in case the latter defaulted in payment of Rs. 20 a month for two months.
It would appear that the relationship between the parties was not simply that of a mortgagee and mortgagor : the creditor also had the rights of a landlord qua his tenant besides other rights conferred on him which were greater than those possessed by an ordinary landlord.
There can be no doubt that by leasing the property back to the mortgagor in the way mentioned above the mortgagee tried to ensure the regular payment of interest but his rights were not limited to that alone.
In case he decided to go into possession himself the only remedy left to the mortgagor was to sue for redemption.
This right under the Limitation Act of 1908 was to enure for 60 years from the date of the mortgage and the mortgagor had not lost his right to redeem notwithstanding the passing of the preliminary decree in the mortgage suit.
The mortgage security continued even after the passing of the said decree : if the mortgagee had continued in possession of the property after the passing of the preliminary decree and did not apply for a final decree, he would only lose his right to recover the mortgage money 729 by sale of the property unless he applied for that purpose within the period of limitation fixed by the Limitation Act.
After the mortgagee had lost his right to apply for a final decree for sale, he did not lose his status as a mortgagee : he only lost his remedy to recover the mortgage money by sale.
The mortgagor did not lose his right to redeem.
We may now examine the authorities which were cited at the Bar in aid of the respective contentions.
In aid of his first proposition Mr. Mukherjee relied principally on the decisions of the Bombay High Court in Harilal Bhagwanji vs Hemshanker(1) and Ramnarain vs Sukhi(2).
The facts of the Bombay case were as follows.
The defendant appellant mortgaged with possession the house in suit for Rs. 7,500/ on August 23, 1952.
Under the deed of mortgage the principal amount was to carry interest at 9% and both principal and interest were charged on the mortgaged property.
A portion of the house was already in the occupation of the plaintiff as the defendant 's tenant on a monthly rental of Rs. 15 and another portion was let out to one Mansukhlal at the rate of Rs. 17 p.m., the defendant himself occupying the remaining part of the house.
Simultaneously with the mortgage a rent note was executed on the same day in respect of the portion of the house in the defendant 's occupation which was leased back to him by the plaintiff for a term of six months at the rate of Rs. 24 4 0 per month.
The plaintiff sued the defendant for possession of the said portion and for arrears of rent on the strength of the rent note.
The defence was that the rent note was a nominal document executed for securing payment of interest and that no relationship of landlord and tenant was created.
It was contended that the principal money and interest were to be realised from the mortgaged property and a suit for rent alone which was in reality interest would not he.
It was held by the High Court that the fact that the two documents had varying periods of operation would not make any difference in the determination of the question as to whether they formed part of the same transaction or not.
Further the rent to be realised from the tenant Mansukhlal was to be credited towards interest and the significant circumstance was that the rent payable by the defendant under the rent note was fixed with a view to making up the interest on the mortgage sum at 9%.
Although the mortgage deed recited that the plaintiff could let out the property to anyone he liked but as the property was already wholly occupied, the High Court took the view that the question of leasing it out to another tenant was not in contemplation of the parties.
As a result of the above findings the court held that the rent note was a mere device for securing payment of interest.
Reliance was placed on Ramnarain vs Sukhi(2) and it was held that although the decree for eviction of (1) A.I. R. 1958 Bombay 8.
(2) A.T.R.1957 Patna 24.
SupCI(NP)/70 2 730 the defendant from the suit property could not stand, that awarding arrears of rent was to be maintained.
In Ramnarain vs Sukhi(1) an application was made by the defend ant for setting aside the decree of the Small Causes court evicting him.
The defendant had executed a usufructuary mortgage in favour of the plaintiff and by a kerayanama executed on the same day had taken back the house on a rent of Rs. 6 per month from the plaintiff.
He had not paid any rent for over three years and the suit was brought for recovery of arrears of rent for the said period.
It was his contention that the agreement between the parties was not for execution of a usufructuary mortgage but one of a simple mortgage.
It was further contended on his behalf that the mortgage and the kerayanama were one and the same transaction and no relationship of landlord and tenant was created and the ijara term having expired the plaintiff 's remedy to recover the house rent which represented the interest the mortgage money could only lie under section 68 of the Transfer of Property Act.
The High Court referred to several decisions and came to the conclusion that the intention of the parties was that the mortgagee would not get possession of the mortgaged property but would only get interest on the amount advanced in the shape of rent so long as the lease continued and the amount payable under the kerayanama was interest on the mortgage money and not rent for use and occupation of the mortgaged property.
The mortgage bond and the kerayanama being part of the same transaction the mortgagee in execution of his decree for money obtained in respect of the so called rent of the house against the mortgagor would not be entitled to execute the decree for arrears of rent by sale of the property, as such a case would be governed by 0.
34 R. 14 Civil Procedure Code.
In the result the claim of the creditor in excess of 9 % p.a. was rejected but as the defendant had been in occupation of the house, although under an invalid lease, he was directed to pay, compensation to the plaintiff for use and occupation of the house for the period of his occupation.
Reference may also be made to the case of Umeshwar Prasad vs Dwarika Prasad(2).
In this case the mortgagor executed a usufructuary mortgage of certain properties for Rs. 14,400 for a period of seven years.
Soon thereafter the mortgagee leased back the entire property to the mortgagor for a period of about seven years at the annual rent of Rs. 432 which was equal to the interest on the sum advanced.
It was held by the Patna High Court that the mortgage bond and the lease deed were parts of the same transaction and the fact that the periods of the two deeds were not identical was immaterial and the case was governed by 0.
34 r. 14 (1) A.I.R. 1957 Patna 24.
(2) A.I.R. 1944 Patna 5.
731 and as such the mortgagee could not execute the decree for arrear of rent by sale of equity of redemption.
In Ganpat Ruri vs Md. Asraf Ali( ') the plaintiff had filed a suit claiming arrears of rent at the rate of Rs. 20 per month in respect of a house which had been given to him by the defendant in usufructuary mortgage by a registered document, the property being let out to the defendant on lease on the same day at the monthly rent of Rs. 20.
Applying the test as to whether on a reasonable construction of the two documents the property given in security was not only for the principal amount secured under the bond but also for the interest accruing thereupon, the court held that the transactions were two different transactions and for this reliance was placed on the fact that no rate of interest was prescribed in the bond and Rs. 20 p.m. could not possibly be treated as interest due on the principal amount of Rs. 500.
In contrast with the above cases reference may be made to the case of Jankidas vs Laxminarain(2).
In this case the plaintiffs who were usufructuary mortgagees of a house gave a lease of it to the defendant mortgagor on rent and put the lessee in possession thereof on the same day.
The rent remaining unpaid the plaintiff filed a suit for arrears of rent and ejectment.
Ultimately however the High Court of the former State of Marwar granted a decree for arrears of rent but refused the prayer for ejectment.
The plaintiff thereupon filed the suit in 1953 claiming arrears of rent amounting to Rs. 126/ for three years preceding the date of the suit.
The suit was resisted by the defendant who, among other pleas, contended that the suit was barred by 0.
II r. 2 C.P.C.
There was said that although the mortgage and the deed of lease represented one transaction that would not mean that no tenancy came into existence by the execution of the deed of lease.
It was held that the right which arose to the mortgagees to sue for rent was an independent obligation though it might be part of the same transaction in the sense that it was brought into existence by an arrangement made at the same time for a common purpose.
In Lalchand vs Nenuram(3) the defendants had executed a mortgage in favour of the plaintiffs agreeing to pay interest at 8 % p.a. which came to Rs. 27 8 0 per month.
The mortgagors had delivered possession to the mortgagees and a registered qabuliat reciting that they were taking on lease the property described at a monthly rental of Rs. 27 8 0.
The lower courts took the view that the mortgage deed was a rent note and part and parcel of the same transaction and the plaintiffs were not entitled to get a decree for (1) A.I.R. 1961 Patna 133.
(2) I.L.R. (3) I.L.R. 732 ejectment on the basis of the rent note.
Rejecting this the Rajasthan High Court observed at p. 952 : "Whether the two documents represent one transaction or two different transactions, a court of law should be anxious to give effect to the terms in both the documents instead of being unduly critical about them.
Having secured the possession of the mortg age, the mortgagee is further entitled to lease it out even to the mortgagor.
It is in the interest of the mortgagor that the property is; leased out to him as he can better look after it.
There is nothing objectionable in this, nor is there any statutory prohibition for 'such transactions.
Now if the parties do this by executing proper documents, it is the duty of the court of law to give effect to them." The reasoning of the Rajasthan judgment seems to be logical and commends itself to us.
In all such cases the leasing back of the property arises because of the mortgage with possession but we find ourselves unable to hold that the mortgagee does not secure to himself any rights under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease is not paid.
If the security is good and considered to be sufficient by the mortgagee there is no reason why he should be driven to file a suit on his mortgage when he can file a suit for realisation of the moneys due under the rent note.
The position of the creditor is strengthened where as in this case the interest on the amount of the mortgage is not the same as the rental fixed.
If during the continuance of the security the mortgagee wants to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had covenanted to pay, there can be no legal objection to it.
Under the provisions of 0.
34 r. 4 he cannot deprive the mortgagor of his right to redeem excepting by proceeding on his mortgage.
Although we express no final opinion on this point it may be that a mortgagee who secures a decree for payment of arrears of rent cannot put the property to sale for realisation of the amount decreed but there can be no objection to his suing for possession if the rent note entitles him to do so.
So long as the mortgagor had a right to redeem the mortgage he can always pay off the mortgagee and get back possession.
This position would continue so long as the property is not sold under a final decree for Sale under the provisions of 0. 34 C.P.C.
In our opinion the second contention put forward on behalf of the appellant has no force.
The rights of a mortgagee do not merge in his rights under the preliminary decree for sale.
As already mentioned, the mortgagee lost his right to recover the money 733 by sale of the mortgaged property; otherwise his security remained intact and the mortgagor continued to have his right to redeem the property.
As regards the third point the only statutory provision to which ,a reference was made was section 28 of the Limitation Act of 1908 which provided that : "At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished.
" If the right of the mortgagee arose on the strength of the rent note which continued to be in force notwithstanding that the period for applying for a final decree for sale had expired there could be no extinction of his right to sue for possession because of section 28 of the Limitation Act.
In the result the appeal fails and is dismissed with costs.
G.C. Appeal dismissed.

summary/full:
On July 29, 1945 the predecessor in interest of the appellant mortgaged his house in Ratlam to K for a sum of Rs. 3,100 with possession.
According to the deed of mortgage interest would run on the said sum at Rs. 0 10 0 per cent per annum till realisation.
The period of redemption was two years.
Simultaneously with the mortgage a rent note was executed by and between the parties under which the mortgagor was to continue to Occupy the premises, at a rental of Rs. 20/ per month.
The rent note provided inter alia that if the executant (i.e. mortgagor) made default in payment of two months ' rent the mortgagee would be entitled to get him evicted.
The mortgagee was also entitled to increase or decrease the rent and the executant was to vacate the.
house whenever asked to do so.
K filed a suit on his mortgage in 1954 and a preliminary decree was passed in his favour.
On his death his legal representatives were substituted in his place on record.
For some reason no application for a final decree for sale of the property was made within the period fixed under the Limitation Act.
The application for this purpose made by the executors to the estate of K was dismissed on July 29, 1960 as barred by limitation.
On December 27, 1960 the said executors filed a suit for ejectment of the appellant alleging that the 'rent for the premises had remained unpaid from September 19, 1957 till November 28, 1960.
The trial judge dismissed the suit.
In first appeal the plaintiffs claim was allowed in full.
The High Court in second appeal maintained the decree of the appellate court.
Appeal by special leave was filed in this Court against the High Court 's judgment.
It was contended by the appellants that : (i) The rent note executed simultaneously with the mortgage was a mere device to secure payment of interest and did not represent an independent transaction.
Further it did not create any relationship of landlord and tenant; (ii) The plaintiffs ' right as mortgagee merged in the decree and execution thereof being barred by the laws of limitation the plaintiffs had lost all their rights; (iii) The mortgage being extinguished the mortgagor could not bring a suit for redemption on account of section 28 of the Limitation Act, 1908.
HELD : The appeal must be dismissed.
(1) The contents of the documents executed by the parties showed that the relationship between the parties was not simply that of a mortgagee and mortgagor the creditor also had the rights of a landlord qua his tenant besides other rights conferred on him which were greater than those possessed by an ordinary landlord.
[728 F] In all such cases the leasing back of the property arises because of the mortgage with possession.
It cannot however be held that the mortgagee 724 does not secure to himself any rights under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease is not paid.
If the security is good and considered to be sufficient by the mortgagee there is no reason why be should be driven to file a suit an his mortgage when be can file a suit for realisation of the moneys due under the rent note.
The position of the creditor is strengthened where as in the present case, the interest on the amount of the mortgagee is not the same as the rent fixed.
If during the continuance of, the security the mortgagee wanted to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had covenanted to pay, there could be no legal objection to it.
Under the provisions of 0.34 r. 4 of the Code of Civil Procedure he could deprive the mortgagor of his right to redeem excepting by proceeding on his mortgage.
It may be (without a final opinion being expressed on the point) that a mortgagee who secured decree for payment of rent cannot put the property to sale for realisation of the amount decreed, but there cas be no objection to his suing for possession if the rent note entitles him to do so.
So long as the mortgagor has a right to redeem the mortgage fie can always pay off the mortgagee and get back possession.
This position would continue so long as the property is not sold under a final decree for sale under the provisions of 0.
34 C.P.C. [732 D G] Lalchand vs Nenuram, I.L.R. , approved.
Harilal Bhagwanji vs Hemshanker, A.I.R. 1958 Bombay 8, Ramnarain vs Sukhi, A.I.R. 1957 Patna 24, Umeshwar Prasad vs Dwarika Prasad, A.I.R. 1944 Patna 5, Ganpat Ruri vs Mad.
Asraf Ali, A.I.R. 1961 Patna 133 and Jankidas vs Laxminarain, I.L.R. , 'referred to.
(ii) Since the mortgagee had only lost his 'right to recover the money by sale of the mortgaged property, his security otherwise remaining intact, and the mortgagor also continued to have his right to redeem the property, the contention on behalf of the appellant that the rights of the mortgagee merged in the preliminary decree could not be accepted.
[732 H] (iii) If the mortgagee had an independent right on the strength of the rent note which continued to be in force notwithstanding that the period for a final decree for sale had expired, there could be no extinction of his right to sue for possession because of section 28 of the Limitation Act.
[733 C]


judgement:
Appeal No. 1924 of 1970.
Appeal by special leave from the judgment and order dated April 28, 1970 of the Allahabad High Court in Special Appeal 'No. 368 of 1970.
section V. Gupte and Sobhagmal Jain, for the appellant. 0.
P. Rana and R. Bana, for the respondents.
591 The Judgment of the Court was delivered by Hegde J.
In this appeal by special leave the true ambit of item 1 in the Schedule to the (to be hereinafter referred to as the Act) read with section 3(1) of that Act comes up for consideration.
The appellant is a manufacturer of certain medicines with the aid of substances like tincture, spirit etc.
The tincture and spirit in their turn contain alcohol.
The Superintendent of Excise called upon the appellant to pay duty under the Act on the medicinal preparation on the ground that they contain alcohol.
The appellant resisted the demand on the ground that the medicines in question were not prepared by adding pure alcohol; the fact that the tincture which is a component of that preparation contains alcohol does not make it a preparation containing alcohol.
That contention was rejected by the Superintendent of Excise as well as by the High Court in the Writ petition brought by the appellant.
It is admitted that alcohol though it was not directly added is a component of the medicinal preparations in question.
The alcohol has not undergone any chemical change into some other substance.
It is present in a liquid form in those preparations.
The question for decision is whether the preparation in question do not attract duty because alcohol was not directly added to the solution.
The contention of the appellant is that unless alcohol is added into the preparation in its free condition, a medicinal preparation does not become dutiable.
For deciding this question we may now read the relevant provisions of the Act.
Section 3(1) of the Act says "There shall be levied duties of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India." "Dutiable goods" is defined in section 2(c) as meaning the medicinal and toilet preparations specified in the Schedule as being subject to the duties of excise levied under this Act: "Medicinal Preparation" is defined in section 2(g) in these words : " "medicinal preparation" includes all drugs which are a remedy or prescription prepared for internal or external use of human beings, or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in human beings or animals.
" 5 9 2 Item 1 of the Schedule, the only item with which we are concerned in this case reads as follows : Item No. Description of Dutiable goods Rate of Duty Medicinal preparation.
Medicinal preparations, being patent or Ten proprietary medicines, containing alcohol Percent and which are not capable of being ab valouem consumed as ordinary alcoholic beverages.
The only other provision which we need consider is section 4 of the Act.
That section reads thus : Where alcohol, opium, Indian hemp or other narcotic drug or narcotic had been supplied to a manufacturer of any suitable goods for use as an ingredient of such goods by, or under the authority of, the collecting Government and a duty of excise on the goods so supplied had already been recovered by such Government under any law for the time being in force, the collecting Government shall, on an application being made to it in this behalf, grant in respect of the duty 'of excise leviable under this Act, a rebate to such manufacturer of the excess, if any, of the duty so recovered over the duty leviable under this Act.
" It was conceded that the preparations with which we are con cerned in this case are medicinal preparations.
They are proprietary medicines and that they are not capable of being consumed as ordinary alcohol beverages.
The only question that has to be decided is whether those preparations contain alcohol.
It is admitted that tincture is a component of that preparation and alcohol is a component of tincture.
Therefore we fail to see how it can be urged that those preparations do not contain alcohol.
In order to attract duty all that is required is that a medicinal preparation should contain alcohol.
Alcohol may be a part of the preparation either because it is directly added to the solution or it came to be included in that medicinal preparation because of one of the components of that preparation contained alcohol.
According to the plain language of the provision all that is required is that the preparation should contain alcohol.
In interpreting a tax ing provision, the courts should not ordinarily concern themselves with the policy behind the provision or even with its impact.
As observed by Rowlatt J. in Cape Brandy Syndicate vs Commissioners of Inland Revenue(1) in a taxing Act one has to look at (1) 593 what is clearly said.
There is no room for any intendment.
There is no equity about a tax.
There is no presumption as to a tax.
Nothing is to be read in, nothing is to be implied.
One can only look fairly at the language used.
It was urged on behalf of the appellant that if we hold that even indirect introduction of alcohol into a medicinal preparation brings that preparation within the scope of section 3(1) of the Act, it would mean multipoint taxation.
Coming to the medicinal preparations with which we are concerned in this case, it was urged that if the view taken by the High Court is correct then, first the tincture used became dutiable and thereafter the medicinal preparations in which tincture was used became dutiable.
It was said that that could not be the intention of the parliament.
We are unable to appreciate this contention.
Multipoint taxation is not unknown to us.
Our attention was invited to section 4 of the Act in support of the Contention that the legislature did not intend to levy multi point tax.
Section 4 provides for rebate of duty on alcohol supplied to the manufacturer of dutiable goods for use as an ingredient of such goods by or under the authority of the collecting government and a duty of excise on goods so supplied bad already been recovered by such Government under any law for the time being in force.
In our opinion this provision instead of supporting the appellant goes to show that multi point tax on medicinal preparations containing alcohol was within the contemplation of the leigslature; otherwise there was no purpose in incorporating section 4 into the Act.
if section 3 did not impose any levy on medicinal preparations of which pure alcohol is not a component, there was no need for section I.
There can be no question of any rebate if there was no levy at all.
Every rebate presupposes an imposition of tax or duty.
But the rebate under section 4 is confined only to those goods which directly come within the scope of section 4 and not to others.
That was the will of Parliament.
If Parliament desired to give rebate only in certain cases and not to others, it cannot be said that as regards the other medicinal preparations there can be no levy.
In our judgment the language of the provision imposing the levy is plain and unambiguous.
It imposes duty on all medicinal preparations containing alcohol.
At the hearing our attention was invited to the decision of the Madras High Court in M/s. Pharm Products Ltd. Thanjavur & ors.
vs Dist.
Rev. Officer(1).
The conclusion reached by that High Court accords with our conclusion.
In the result this appeal fails and the same is dismissed with costs.
V.P.S. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
The appellant is a manufacturer of certain medicines with the aid of substances like tincture, spirit, etc., which contain alcohol.
On the question whether he was liable to pay duty under the Medicinal and Toilet Preparation (Excise Duties) Act, 1955, HELD : (1) The preparations are proprietary medicinal preparations and are not capable of being consumed as ordinary alcohol beverages, According to Item 1 of the Schedule to the Act, in order to attract duty, all that is required is that the medicinal preparation should contain alcohol.
Alcohol may be a part of the preparation either because it is directly added to the solution or it came to be included in the medicinal preparation because one of its components contains alcohol.
[592 E G] (2)It may be that a tincture is dutiable under the item, and, when the medicinal preparation in which it was used is also made dutiable it will involve multi point taxation.
But section 4 of the Act shows that the multi point tax on medicinal preparations containing alcohol was within the contemplation of the Legislature.
That section provides for rebate of duty on alcohol supplied to the manufacturer of dutiable goods, and, every rebate pressupposes imposition of tax or duty.
[593 B F] (3) The rebate under section 4 is confined only to those goods which directly come within the scope of section 4 and not to others.
From such a provision it cannot be said that as regard the other medicinal preparations, there can be no levy when the language of the provision imposing the levy is plain and unambiguous.
[593 F G] M/,s .
Pharm Products Ltd. Thanjavur vs District Revenue Officer , approved.
Cape Brandy Syndicate vs Commissioners of Inland Revenue. , referred to.


judgement:
Appeal No. 2394 of 1968.
Appeal under section 116A of the Representation of the People Act, 1951 from the judgment 'and order dated July 24, 1968 of the Mysore High Court in Election Petition No. 9 of 1967.
B. section, Patil, Vineet Kumar and Shyamala Pappu, for the appellant.
A. V. Albal and M. Veerappa, for respondent No. 1.
The Judgment of the Court was delivered by GROVER, J.
This is an appeal from a judgment of the Mysore High Court dismissing an election petition which had been filed by two electors challenging the election of respondent No. 1 B. D. Jatti from the Jamkhandi Constituency at the General Elections held in 1967.
The last date for filing of nomination papers was January 19, 1967.
The polling took place on February 2, 1967 and the result was declared on February 22, 1967.
The only contesting candidates were respondent No. 1 and respondent No. 2 M. M. Shivappa.
Respondent No. 1 secured 24,578 votes whereas respondent No. 2 got 21,261 votes.
The election petition was filed 613 on April 6, 1967 by I. section Ghattarki and P. R. Belagali who were electors in the Jamkhandi Constituency, Each of them had acted as an election agent of respondent No. 2.
Petitioner No. 1 Ghattarki was his election agent from February 10, 1967 till the last date of the election and petitioner No. 2 Belagali acted as an election agent from January 19, 1967 to February 4, 1967.
The trial of the petition commenced on December 11, 1967 and after certain witnesses had been examined on February 1, 1967 petitioner No. 1, Ghattarki, made an application praying for permission to withdraw from the petition "for all purposes".
Petitioner No. 2 objected to his withdrawal.
The learned judge dismissed the application of petitioner No. 1 on the ground that section 110(1) of the Representation of the People Act, 1951, hereinafter called the "Act", dil not permit withdrawal by one petitioner without the consent of his co petitioner.
It has, however, been noted by the learned judge that both the petitioners continued to be represented by one counsel Shri B. section Patil.
It may be mentioned at this stage that the election petition is a very long document and that the evidence which has been produced by the parties is also voluminuous.
The judgment of the learned judge consists of 227 printed pages.
A number of issues were framed but the controversy before us has been confined only to certain points.
The first question which falls for consideration arises out of issue No. 1 which consists of three clauses and was framed in the following terms "1 (a) Do the petitioners prove that the 1st respondent was not an elector at all and therefore not qualified to stand for election ? (b) Are the petitioners precluded from questioning the validity of the entry of the name of the 1 st respondent as elector in the Electoral Roll relating to Jamkhandi Constituency ? (c) Has this Court no jurisdiction to go into the said question of validity ?" It was held by the leaned trial judge that the petitioners (in the election petition) were not precluded from questioning the validity of the entry of the name of respondent No. 1 as an elector in the Electoral Roll relating to Jamkhandi Constituency and that the c court had the jurisdiction to go into that question.
It was, however, found on a consideration of the evidence that the petitioner& had failed to prove that respondent No. I was not an elector and was not qualified to stand for election to a seat in the Mysore Legislative assembly, from Jamkhandi constituency.
12 LA36SupCI/71 614 If the view of the trial judge that the court had the jurisdiction in an election petition to go into the question of the validity of an entry in an Electoral Roll is erroneous and if the court was precluded from deciding this matter it will be altogether unnecessary to consider the evidence led for the purpose of clause (a) of issue No. 1.
The principal allegations of the petitioners on issue No. 1(a) were that respondent No. I had ceased to be a person ordinarily resident within the constituency of Jamkhandi during the period relevant to the 1967 General Elections.
It was further asserted that by long stay in the city of Bangalore the name of respondent No. I had been entered in the Electoral Roll relating to the municipal area of that city and that respondent No. 1 with the object ,of getting his name entered in the Roll of Jamkhandi Constituency had either got his name deleted from the Bangalore Roll or had tried to get it changed from that Roll to the Roll of Jamkhandi ,Constituency.
In order to decided the jurisdiction and powers of, the court trying an election petition under the provisions of the Act to determine the validity or legality of an entry in an Electoral Roll we shall have to look at the relevant provisions of the Act.
The Representation of the People Act 1950, to be called the "Act of 1950" and the Constitution.
Part 11 of the Act deals with the qualifications and disqualifications for Membership of Parliament ,and State Legislature.
Section 5(c) is as follows : "A person shall not be qualified to be chosen to fill a seat in the legislative assembly of a State unless.
(a). . . . . (b). . . . . (c) in the case of any other seat he is an elector for any Assembly constituency in that State.
" The word "elector" is defined by section 2 (1 ) (e) to mean in relation to a constituency a person whose name is entered in the Electoral Roll of that Constituency for the time being in force and who is not subject to any of the disqualifications mentioned in section 16 of the Act of 1950.
Chapter III of the Act contains disqualifications for Membership of Parliament and State Legislatures.
According to section 7(b) "disqualified" means disqualified for being chosen as and for being a Member of either House of Parliament or of the Legislative Assembly etc.
Sections 8 to 11 give the disqualifications on conviction for certain offences, for commission of corrupt practices and other matters which need not be noticed.
The position under 615 the Act,.
therefore, is that in order to stand for election to a legislative assembly of a State a person must be an elector for any assembly constituency in that State and he must not be subject to any of the disqualifications mentioned in section 16 of the Act of 1950 or the disqualifications given in Chapter III of the Act.
The Act of 1950 was meant to provide for the allocation of seats and the delimitation of constituencies for the purpose of elections, to the House of the People and the legislatures of States, the qualifications of voters at such elections, the preparation of Electoral Rolls. . and matters connected therewith.
Part III thereof contains provisions for Electoral Rolls for assembly constituencies.
According to section 15 for every constituency there shall be an Electoral Roll which shall be prepared in accordance with the provisions of the Act of 1950 under the superintendence, direction and control of the Election Commission.
Section 1 6 is in these terms : section 16.
"Disqualifications for registration in an electoral roll. (1) A person shall be disqualified for registration in an electoral roll if he (a) is not a citizen of India; or (b) is of unsound mind and stands so declared by a competent court; or (c) is for the time being disqualified from voting under the provisions of any law relating to corrupt practices and other offences in connection with elections.
(2) The name of any person who becomes so disqualified after registration shall forthwith be struck off the electoral roll in which it is included : Provided that. . . . .
Section 19 gives the conditions of registration in the Electoral Roll.
It provides that every person who is not less than 21 years of age on the qualifying date and is ordinarily resident in a constituency shall be entitled to be registered in the Electoral Roll for that constituency.
Section 20 deals with the meaning of "ordinarily resident".
The preparation and revision of Electoral Roll has to be made in accordance with section 21 and the correction of entries 'is provided by section 22.
Section 24 contains a provision for an appeal which can be filed to the Chief Electoral Officer from any order of the Electoral Registration Officer under section 22 or section 23.
Under section 30 no civil court shall have jurisdiction to entertain or 616 adjudicate upon any question whether any person is or is not entitled for registration in an Electoral Roll for a constituency.
There are elaborate rules which have been promulgated for preparation and revision of the Electoral Rolls, namely, Electors ' Rules 1960.
It may be noted that the conditions about being ordinarily resident in a constituency for the purpose of registration are meant for that purpose alone and have nothing to do with the disqualifications for registration which are prescribed by section 16 of the Act of 1950 which alone are relevant to the definition of an "elector" as given in section 2 (1) (e) of the Act.
The entire scheme of the Act of 1950 and the amplitude of its provisions show that the entries made in an Electoral Roll of a constituency can only be challenged in accordance with the machinery provided by it and not in any other manner or before any other forum unless some question of violation of the provisions of the Constitution is involved.
Article 173 of the Constitution relates to qualifications for membership of the State legislature.
It reads : article 173 "A person shall not be qualified to be chosen to fill a seat in the Legislature of a State unless he (a) is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Election Commission an oath or affirmation according to the form set out for the purpose in the Third Schedule; (b) is, in the case of a seat in the Legislative Assembly, not less than twenty five years of age and, in the case of a seat in the Legislative Council, not less than thirty years of age; and (c) possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament." The qualifications, as mentioned previously, have been prescribed by section 5 of the Act.
Condition (b) in section 19 of the Act of 1950 of being ordinarily resident in a constituency finds no place in any of the provisions of the Act or in article 173 of the Constitution.
The decision of this Court in Durga Shankar Mehta vs Thakur Raghurai Singh & Others(1) involved non compliance with the provisions of clause (b) of article 173 and in case of a candid ate who was constitutionally incapable of being returned as a member it was held that the Election Tribunal could declare his election to be void by applying sub section
(2) (c) of section 1 00 of the Act.
The present case is clearly not of that kind and.
no violation or in (1) [1955] 1 S.C.R. 267.
6 17 fringement of any provision of article 173 has been or could be established.
The other provisions relating to election are contained in Part XV of the Constitution.
Article 324 deals with the superintendence, direction and control of elections which are vested in the Election Commission.
Article 325 declares that no person shall be ineligible for inclusion in an, Electoral Roll on account only of religion, race, caste, sex or any of them.
Article 326 says that the elections to the House of the People and the Legislative Assemblies of States shall be on the basis of adult franchise.
Article 327 gives power to the Parliament to make provisions with respect to elections to Legislatures.
Article 329 bars the interference of courts in electoral matters.
By virtue of that Article no election shall be called in question except by an election petition.
It is abundantly clear that in the present case the question whether respondent No. 1 was ordinarily resident in Jamkhandi constituency during the material period and was entitled to be registered in the Electoral Roll could not be the subject matter of enquiry except in accordance with the provisions of the Act of 1950.
The grounds on which the election can be declared to be void under the Act are set out in section 100 of the Act.
Clause (d) is "that the result of the election, in so far as it concerns a returned candidate, has been materially affected (i). . . (ii). . (iii). . . (iv) by any non compliance with the pro visions of the Constitution or of this Act or of any rules or orders made under this Act.
" Nothing could be clearer than the ambit of this provision.
It does not entitle the court in an election petition to set aside any election on the ground of non compliance with the provisions of the Act of 1950 or of any rules made thereunder, with the exception of section 16.
The learned trial judge does not appear to have fully and properly appreciated the correct ratio and true determination of the points involved in Durga Shanker Mehta 's(1) case.
The distinction is too obvious to bear repetition.
It seems that a Bench decision of the Mysore High Court in K. Sriramulu vs K. Deviah(2) was distinguished without any justification by the learned judge.
It was clearly laid therein that in an election petition the correctness of the Electoral Roll cannot be gone into.
The decision of a Full bench of the Punjab and Haryana High Court in Roop Lal Mehta vs Dhan Singh & Others(1) about the finality of the Electoral Roll was, also not noticed.
In this view of the matter the evidence relating to issue No. 1(a) becomes wholly irrelevant and redundant.
The decision on that issue in favour of respondent No. 1, is, however, affirmed.
(3) 618 [His Lordship next considered the evidence in respect of the allegations of corrupt practice and then proceeded :] In conclusion it may be observed that the impression left by the facts and circumstances of this case on our mind is that the authorities concerned in the Mysore State were not careful or discreet enough in posting Hasbi for the second time to Jamkhandi in July 1966 when it was known that the relations between him and respondent No. 2 had been very unhappy in the past and by which time it could also be foreseen and appears to be known that there would be another contest between respondent No. 1 and respondent No. 2 who had been fighting elections since 1952.
Similarly with regard to Kallur it would have been a wise step to transfer him before the elections from the area in which Jamkhandi is situate because he had also figured similarly in the pre vious contest between the two respondents.
Free and fair elections are the very foundation of democratic institutions and just as it is said that justice must not only be done but must also seen to be done; similarly elections should not only be fairly and properly held but should also seem to be so conducted as to inspire confidance in the minds of the electors that everything has been above board and has been done to ensure free elections.
It will be a sad day in the history of our country when the police and the Government officers create even an impression that they are interfering for the benefit of one or the other candidate.
This is particularly so if a candidate is holding an important position or assignment like respondent No. 1, who, at the material time was a Minister in the State.
The appeal fails and is dismissed.
In view of all the facts and circumstances of the case we make no order as to costs in this Court.
R.K.P.S. Appeal dismissed.

summary/full:
By an election petition two electors of the constituency, the appellants, challenged the election of the first respondent to, the Mysore Legislative Assembly in 1967 from the Jamkhandi constituency.
It was alleged inter alia that the first 'respondent had ceased to be a person ordinarily resident within the constituency during the period relevant to the 1967 General Elections, and the validity of the entry of his name on the Electoral Roll was questioned; it was claimed that he was not therefore qualified to stand for election from the constituency.
The petition also contained allegations of corrupt practices including misuse by certain Police Officers of their position to prevent voters from voting freely, and malpractices by the Presiding Officer at the time of polling, etc.
After framing an issue on the question and taking the view that the Court had jurisdiction to determine the validity of the inclusion of the first respondent 's name as an elector on the Electoral Roll, the trial judge held on a consideration of the evidence, that the petitioners had failed to prove he first respondent was not an elector and was not qualified to stand for election from the constituency.
The High Court also rejected the allegations of corrupt practices and dismissed the petition On appeal to this Court, HELD : (i) Under section 30 of the Representation of the People Act, 1950, no civil court shall have jurisdiction to entertain or adjudicate upon any question whether any person is or is not entitled for registration in an Electoral Roll for a constituency.
There are elaborate rides which have be en promulgated for preparation and revision of the Electoral Rolls, namely, Electors ' Rules 1960.
The conditions about being ordinarily resident in a constituency for the purpose of registration are meant for that purpose alone and have nothing to do with the disqualifications for registration which are prescribed by section 16 of the Act of 1950, which alone are relevant to the definition of an "elector" as given in section 2(1)(e) of the Act of 1951.
The entire scheme of the Act of 1950 and the amplitude of its provisions show that the entries made in an Electoral Roll of a constituency can only be challenged in accordance with the machinery provided by it and not in any other manner or before any other forum unless some question of violation of the provisions of the Constitution is involved.
The present case did not also involve any violation or infringement of Article 173 or any other provision of the Constitution.
[,615 H] The question whether respondent No. 1 was ordinarily resident in Jamkhandi constituency during the material period and was entitled to 612 be registered in the Electoral Roll could not therefore be the subject matter of enquiry except in accordance with the provisions of the Act of 1950.
Under section 100(1) (d) an election can be declared void only if the result of the election, in so far as it concerns a returned candidate, has been materially affected by any non compliance with the provisions of the Constitution or of the Act of 1951 or of any rules or orders made thereunder.
Nothing could be clearer than the ambit of this provision.
It does not entitle the court in an election petition to set aside any election on the ground of non compliance with the provisions of the Act of 1950 or of any rules made hereunder with the exception of section 16.
[617 E] Durga Shankar Mehta vs Thakur Raghurai Singh & Others, [1955] 1 S.C.R. 267; K. Sriramulu vs K. Deviah ; Roop Lal Mehta vs Dhan Singh and Others ; referred to.
On the evidence, no reasons were shown for this court to differ from the findings of the Trial Judge on the allegations of corrupt practices.
Meghraj Patodis vs R. K. Birla & Others, Civil Appeal No. 1094/69 dated 10 9 1970; referred to.


judgement:
Appeal No. 162 of 1952.
Appeal from the Judgment and Order dated the 7th day of June, 1951, of the High Court of Judicature at Calcutta in Income tax Reference No. 60 of 1950 arising out of the Order dated the 22nd day of November, 1949, of the Income tax Appellate Tribunal in I.T.A. Nos. 1026 and 1027 of 1948 49 N. C. Chatterjee for the appellant.
Porus A. Mehta for the respondent.
November, 11.
The Judgment of the Court was delivered by, BHAGWATI J.
This appeal from the judgment And order of the High Court of Judicature at Calcutta with leave under section 66 A (2) of the Indian Income tax Act raises an interesting question as to the line of demarcation between capital expenditure and revenue expenditure.
On the 14th November, 1938, the appellant company acquired from the Government of Assam a lease of certain limestone quarries, known as the Komorrah quarries situated in the Khasi and Jaintia Hills District for the purpose of carrying on the manufacture of cement.
The lease was for 20 years commencing on the 1st November, 1938, and ending on the 31st October, 1958, with a clause for renewal for a further term of 20 years.
The rent reserved was a half yearly rent certain of Rs. 3,000 for the first two years and thereafter a half yearly rent certain of Rs. 6,000 with the provision for payment of further royalties in certain events.
In addition to these rents and royalties two further sums were payable under the special covenants contained in clause& 4 and 5 of the lease as " protection fees ".
Under clause 4 the protection was in respect of another group of quarries called the Durgasil area, the lessor undertaking not to grant any lease, permit or prospecting licence regarding the limestone to any other party 976 therein without a condition that no limestone should be used for the manufacture of cement in consideration of a sum of Rs. 5,000 payable annually during the whole period of the lease.
Under clause 5 a further protection was given in respect of the whole of the Khasi and Jaintia Hills District, a similar undertaking being given by the lessor in consideration of a sum of Rs. 35,000 payable annually but only for 5 years from the 15th November, 1940.
In the accounting years 1944 45 and 1945 46 the company paid its lessor sums of Rs. 40,000 in accordance with these two covenants and claimed to deduct the sums in the computation of its business profits under the provisions of section 10(2) (xv) of the Income tax Act in the assessments for the assessment years 1945 46 and 1946 47.
The Income tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal rejected the contention of the company and the following question, as ultimately reframed, was at the instance of the company referred by the Tribunal to the High Court for its decision : " Whether, in the circumstances of the case, the two sums of Rs. 5,000 and Rs. 35,000 paid under clauses 4 and 5 of the deed of the 14th November, 1938, were rightly disallowed as being expenditure of a capital nature and so not allowable under section 10(2) (xv) of the Indian Income tax Act ".
The High Court answered the question in the affirmative and hence this appeal.
Clauses 4 and 5 of the deed of lease may be here set out : 4.
The lessee shall pay to the lessor Rs. 5,000 (Rupees five thousand) only annually during the period of the lease on November 15th starting from November 15th, 1938, as a protection fee.
In consideration of that protection fee the lessor undertakes not to allow any person or company any lease permit or prospecting licence for limestone in the group of quarries as described in Schedule 2 and delineated in the plan thereto annexed and therein coloured blue called the Durgasil area without a condition in such 977 lease permit or prospecting licence that no limestone ,shall be used for the manufacture of cement.
5.Besides the above protection fee the lessee shall pay to the lessor annually the sum of Rs. 35,000 (Rupees thirty five thousand) only for five years starting from the 15th day of November, 1940, as a further protection fee so long as the total amount of limestone quarried by the lessee in a year does not exceed 22,00,000 maunds per year whether quarried in the area of this lease or elsewhere or obtained by purchase from other quarries in the Khasi and Jaintia Hills by the lessees.
If, however, in any year the total amount of limestone converted into cement at the lessee 's Sylhet,Factory exceed 22,00,000 maunds the lessee will be entitled to an abatement at the rate of Rs. 20 for every 1,000 maunds quarried in excess of 22,00,000 maunds and the lessee shall pay the sum of Rs. 35,000 less the abatement calculated on the basis hereinbefore mentioned.
Limestone which is not converted into cement at the lessee 's factory in Sylhet district will not entitle the lessee to any abatement in the protection fee.
The lessor in consideration of the said payment undertakes not to allow any person or company any lease permit or prospecting licence for limestone in the whole of Khasi and Jaintia Hills district without a condition in such lease permit or prospecting licence that no limestone extracted shall be used directly or indirectly for the manufacture of cement.
The lessor will be empowered to terminate this agreement for the payment of a protection fee at any time after it has run for 5 years by giving six month,% ' notice in writing by registered letter addressed to 11, Clive Street, Calcutta but the lessee will not be entitled to terminate this agreement during the currency of the lease except with the consent of the lessor.
It is not clear as to what was meant by the last provision contained in clause 5, the lessee in the event of his having paid the sum of Rs. 35,000 for the 5 years having nothing else to do but enjoy the benefit of the covenant on the part of the lessor during the subsequent period of the lease.
This provision is however immaterial for our purposes.
978 The line of demarcation between capital expenditure and revenue expenditure is very thin and learned Judges in England have from time to time pointed out the difficulties besetting that task.
Lord Macnaghten a Dovey vs Cory(1), administered the following warning: I do not think it desirable for any tribunal to do that which Parliament has abstained from doing that is, to formulate precise rules for the guidance or embarrassment of business men in the conduct of business affairs.
There never has been, and I think there never will be, much difficulty in dealing with any particular case on its own facts and circumstances; and, speaking for myself, I rather doubt the wisdom of attempting to do more." Rowlatt J. also expressed himself much to the same effect in Countess Warwick Steamship Co. Ltd. vs Ogg(1): " It is very difficult, as I have observed in previous cases of this kind, following the highest possible authority, to lay down any general rule which is both sufficiently accurate and sufficiently exhaustive to cover all or even a great number of possible cases, and I shall not attempt to lay down any such rule.
" Certain broad tests have however been attempted to be laid down and the earliest was the one indicated in the following observations of Bowen L.J. in the course of the argument in City of London Contract Corporation vs Styles (3) : " You do not use it 'for the purpose of ' your concern, which means, for the purpose of carrying on your concern, but you use it to acquire the concern.
" The expenditure in the acquisition of the concern would be capital expenditure; the expenditure in carrying on the concern would be revenue expenditure.
Lord Dunedin in Vallambrosa Rubber Co., Ltd. vs Farmer ( 4), suggested another criterion at page 536 : Now, I don 't say that this consideration is absolutely final or determinative, but in a rough way I think it is not a bad criterion of what is capital (1) , 488.
(2) [1924] 2 K.B. 292, 298.
(3)(1887) , 243.
(4)(1910) , 536.
979 expenditure as against what is income expenditure to say that capital expenditure is a thing that is a going to be spent once and for all, and income expenditure is a thing that is going to recur every year.
" This test was adopted by Rowlatt J. in Ounsworth (Surveyor of Taxes) vs Vickers Ltd. (1), and after quoting the above passage from the speech of Lord Dunedin he observed that the real test was between expenditure which was made to meet a continuous demand for ex.
penditure as opposed to an expenditure which was made once for all.
He however suggested in the course of his judgment another view point and that was whether the particular expenditure could be put against any particular work or whether it was to be regarded as an enduring expenditure to serve the business as a whole, thus laying the foundation for the test prescribed by Viscount Cave L.C. in Atherton 's case (2).
Atherton vs British Insulated and Helsby Cables Ltd. (2), laid down what has almost universally been accepted as the test for determining what is capital expenditure as distinguished from revenue expenditure.
Viscount Cave L.C. there observed at page 192: "But there remains the question, which I have found more difficult, whether apart from the express prohibitions, the sum in question is (in the words used by Lord Sumner in Usher 's case(3) ), a proper debit item to be charged against incomings of the trade when computing the profits of it; or, in other words, whether it is in substance a revenue or a capital expenditure.
This appears to me to be a question of fact which is proper to be decided by the Commissioners upon the evidence brought before them in each case ; but where, as in the present case, there is no express finding by the Commissioners upon the point, it must be determined by the Courts upon the materials which are available and with due regard to the principles which have been laid down in the authorities.
Now, in Vallambrosa Rubber Company vs Farmer (4).
Lord Dunedin, as Lord President of the Court of Session, expressed the opinion that "in a rough way" it was (1)(1915) (2)(1925) (3)(19I4) (4)(19IO) 536, 980 "not a bad criterion of what is capital expenditure as against what is income expenditure to say that capital expenditure is a thing that is going to be spent once and for all and income expenditure is a thing which is going to recur every year" ; and no doubt this is often a material consideration.
But the criterion suggested is not, and was obviously not, intended by Lord Dunedin to be a decisive one in every case; for it is easy to imagine many cases in which a payment, though made "once and for all", would be properly chargeable against the receipts for the year. .
But when an expenditure is made, not only once and for all.
but with a view to bringing into existence an asset or an advan tage for the enduring benefit of a trade, I think that there is very good reason (in the absence of special circumstances leading to an opposite conclusion) for treating such an expenditure as properly attributable not to revenue but to capital." Viscount Haldane however in John Smith & Son vs Moore (H. M. Inspector of Taxes) (1), suggested another test and that was the test of fixed or circulating capital, though even there he observed that it was not necessary to draw an exact line of demarcation between the fixed and circulating capital.
The line of demarcation between fixed and circulating capital could not be defined more precisely than in the description of Adam Smith of fixed capital as what the owner turns to profit by keeping it in his own possession, and circulating capital as what he makes profit of by parting with it and letting it change masters.
This test was adopted by Lord Hanworth M.R. in Anglo Persian Oil Co. vs Dale (2), where he observed: " I am inclined to think that the question whether the money paid is provided from the fixed or the circulating capital comes as near to accuracy as can be suggested.
Lord Cave 's test, that where money is spent for an enduring benefit it is capital, seems to leave open doubts as to what is meant by "enduring" . . . . (1) , 282.
(2) ,138.
981 It seems rather that the cases of Hancock (1) and of Mitchell vs B. W. Noble, Ltd. (2) and of Mallet vs Staveley Coal & Iron Co. (3), give illustrations that the test of fixed or circulating capital is the true one; and where, as in this case, the expenditure is to bring back into the hands of the company a necessary ingredient of their existing business important, but still ancillary and necessary to the business which they carry onthe expenditure ought to be debited to the circulating capital rather than to the fixed capital, which is em.
ployed in and sunk in the permanent even if wasting assets of the business.
" This preference of his was reiterated by Lord Hanworth M.R. in Golden Horse Shoe (New) Ltd. vs Thurgood (H. M. Inspector of Taxes) "The above cases serve to establish the difficulty of the question rather than to affirm any principle to be applied in all cases.
Indeed, in the last case cited, Atherton vs British Insulated and Helsby Cables Ltd. (5) Lord Cave says that a payment 'once and for all ' a test which had been suggested by Lord Dunedin in Vallambrosa Rubber Company ' vs Farmer(1), was not true in all cases, and he found authority for that statement in Smith vs Incorporated Council of Law Reporting for England and Wales (7) and the Anglo Persian case(8 ) already referred to is another.
The test of circulating, as contrasted with fixed capital, is as good a test in most cases, to my mind, as can be found ; but that involves the question of fact, was the outlay in the particular case from fixed or circulating capital ?" Romer L.J. at page 300 pointed out the difficulties in applying this test also.
"Unfortunately, however, it is not always easy to determine whether a particular asset belongs to the one category or the other.
It depends in no way upon what may be the nature of the asset in fact or in law.
Land may in certain circumstances be circulating (2) (2) (1927] 1 K.B. 719.
(3) (1928] 2 K.B. 405.
(4) , 298. 125 (5) , 192.
(6) (7) (8) 982 capital.
A chattel or a chose in action may be fixed capital.
The determining factor must be the nature of the trade in which the asset is employed.
The land upon which a manufacturer carries on his business is part of his fixed capital.
The land with which a dealer in real estate carries on his business is part of his circulating capital.
The machinery with which a manufacturer makes the articles that he sells is part of his fixed capital.
The machinery that a dealer in machinery buys and sells is part of his circulating capital, as is the coal that a coal merchant buys and sells in the course of his trade.
So, too, is the coal that a manufacturer of gas buys and from which he extracts his gas. " In Van Den Berghs, Limited vs Clark (H. M. Inspector of Taxes)(1), Lord Macmillan however veered round to Viscount Cave 's test and expressed his disapproval of the test of fixed and circulating capital.
He reviewed the various authorities and stated : " My Lords, if the numerous decisions are examined and classified, they will be found to exhibit a satisfactory measure of consistency with Lord Cave 's principle of discrimination.
" As regards the test of fixed and circulating capital he observed, at page 432 : " I have not overlooked the criterion afforded by the economists ' differentiation between fixed and circulating capital which Lord Haldane invoked in John Smith & Son vs Moore(1), and on which the Court of Appeal relied in the present case, but I confess that I have not found it very helpful. " The Privy Council in Tata Hydro Electric Agencies, Limited, Bombay vs Commissioner of Income tax, Bombay Presidency and Aden(1), pronounced at page 226: "What is money wholly and exclusively laid out for the purposes of the trade ' is a question which must be determined upon the principles of ordinary commercial trading.
It is necessary, accordingly, to attend (1) ; (2) , (3) (1937) L.R, 64 I.A. 215.
983 to the true nature of the expenditure, and to ask oneself the question, is it a part of the company 's working expenses; is it expenditure laid out as part of the process of profit earning ?" In the case before them they came to the conclusion that the obligation to make the payments was undertaken By the appellants in consideration of their acquisition of the right and opportunity to earn profits, i.e., of the right to conduct the business and not for the purpose of producing profits in the conduct of the business.
The distinction was thus made between the acquisition of an income earning asset and the process of the earning of the income.
Expenditure in the acquisition of that asset was capital expenditure and expenditure in the process of the earning of the profits was revenue expenditure.
This test really is akin to the one laid down by Bowen L.J. in The City of London Contract Corporation Ltd. vs Style8(1).
Dixon J. expressed a similar opinion in Sun Newspapers Limited and the Associated Newspapers Limited vs The Federal Commissioner of Taxation(1), at page 360: " But in spite of the entirely different forms, material and immaterial, in which it may be expressed, such sources of income contain or consist in what has been called a 'profit yielding subject," the phrase of Lord Blackburn in United Collieries Ltd. vs Inland Revenue Commissioners(3).
As general conceptions it may not be difficult to distinguish between the profit yielding subject and the process of operating it.
In the same way expenditure and outlay upon establishing, replacing and enlarging the profit yielding subject may in a general way appear to be of a nature entirely different from the continual flow of working expenses which are or ought to be supplied continually out of the returns of revenue.
The latter can be considered, estimated and determined only in relation to a period ,or interval of time, the former as at a point of time.
For the one concerns the instrument for earning profits (1) (2) (1038) ; (3) , 220.
984 and the other the continuous process of its use or employment for that purpose.
These are the three criteria adopted for distinguishing capital expenditure from revenue expenditure though it must be said that preponderance of opinion is to be found in support of Viscount Cave 's test as laid down in Atherton 's case(1).
Viscount Cave 's test has also been adopted almost universally in India: vide Munshi Gulab Singh & Sons V. Commissioner of Income tax(2), Commissioner of Income tax, Bombay vs Century Spinning, Weaving & Manufacturing Co. Ltd.(1), Jagat Bus Service, Saharanpur vs Commissioner of Income tax, U. P. & Ajmer Merwara(4), and Commissioner of Income tax, Bombay vs Finlay Mills Ltd.(5).
In Commissioner of Income tax, Bombay vs Century Spinning, Weaving & Manufacturing Co., Ltd.(3), Chagla J. observed, at page 116: " The legal touchstone which is almost invariably applied is the familiar dictum of Viscount Cave in Atherton 's case(1). .
Romer L.J. felt that this definition had placed the matter beyond all controversy see remarks in Anglo Persian Oil Co. 's case(6).
But Lord Macmillan in Van Den Bergh 's case(1), felt that Romer L.J. had been unduly optimistic and the learned Law Lord was of the opinion that the question whether a particular expenditure fell on one side of the line or other was a task of much refinement.
But on the whole I think that the definition of Viscount Cave is a good working definition ; and if one were to supplement it with the definition suggested by Mr. Justice Lawrence in Southern vs Borax Consolidated Ltd.(1), whether an expenditure had in any way altered the original character of the capital asset, we have a legal principle which can be applied to any set of given facts.
(1) (1925) to T.C. 155.(5) (1952] S.C.R. 11.
(2) [1945]14 I.T.R. 66.(6) (3) ; (4) [1942] 10 I.T.R. Suppl.
1, 6. 985 In Benarsidas Jagannath, In re(1), a Full Bench of the Lahore High Court attempted to reconcile all these decisions and deduced the following broad test for distinguishing capital expenditure from revenue expenditure.
The opinion of the Full Bench was delivered by Mr. Justice Mahajan as he then was, in the terms following: " It is not easy to define the term 'capital expenditure ' in the abstract or to lay down any general and satisfactory test to discriminate between a capital and a revenue expenditure.
Nor is it easy to reconcile all the decisions that were cited before us for each case has been decided on its peculiar facts.
Some broad principles can, however, be deduced from what the learned Judges have laid down from time to time.
They are as follows : 1.
Outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment: vide Lord Sands in Commissioners of Inland Revenue vs Granite City Steamship Company(1).
In City of London Contract Corporation vs Styles(1), at page 243, Bowen L.J. observed as to the capital expenditure as follows : " You do not use it 'for the purpose of ' your concern, which means, for the purpose of carrying on your concern, but you use it to acquire the concern.
Expenditure may be treated as properly attributable to capital when it is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade: vide Viscount Cave L.C. in Atherton vs British Insulated and Helsby Cables Ltd.(1).
If what is got rid of by a lump sum payment is an annual business expense chargeable against revenue, the lump sum payment should equally be regarded as a business expense, but if the lump sum payment brings in a capital asset, then that puts the business on another footing altogether.
Thus, if labour saving machinery was acquired, the cost of such acquisition cannot be (1) (3) (2) , 14.
(4) 986 deducted out of the profits by claiming that it relieves the annual labour bill, the business has acquired anew asset, that is, machinery.
The expressions 'enduring benefit ' or 'of a permanent character ' were introduced to make it clear that the asset or the right acquired must have enough durability to justify its being treated as a capital asset.
3.Whether for the purpose of the expenditure, any capital was withdrawn, or, in other words, whether the object of incurring the expenditure was to employ what was taken in as capital of the business.
Again, it is to be seen whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital.
Fixed capital is what the owner turns to profit by keeping it in his own possession.
Circulating or floating capital is what he makes profit of by parting with it or letting it change masters.
Circulating capital is capital which is turned over and in the process of being turned over yields profit or loss.
Fixed capital, on the other hand, is not involved directly in that process and remains unaffected by it".
This synthesis attempted by the Full Bench of the Lahore High Court truly enunciates the principles which emerge from the authorities.
In cases where the expenditure is made for the initial outlay or for extension of a business or a substantial replacement of the equipment, there is no doubt that it is capital expenditure.
A capital asset of the business is either acquired or extended or substantially replaced and that outlay whatever be its source whether it is drawn from the capital or the income of the concern is certainly in the nature of capital expenditure.
The question however arises for consideration where expenditure is incurred while the business is going on and is not incurred either for extension of the business or for the substantial replacement of its equipment.
Such expenditure can be looked at either from the point of view of what is acquired or from the point of view of what is the source from which the expenditure is incurred.
If the expenditure is made for acquiring or bringing into existence an. asset or advantage for the enduring benefit of the 987 business it is properly attributable to capital and is of the nature of capital expenditure.
If on the other hand it is made not for the purpose of bringing into existence any such asset or advantage but for running the business or working it with a view to produce the profits it is a revenue expenditure.
If any such asset or advantage for the enduring benefit of the business is thus acquired or brought into existence it would be immaterial whether the source of the payment was the capital or the income of the concern or whether the payment was made once and for all or was made periodically.
The aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure.
The source or the manner of the payment would then be of no consequence.
It is only in those cases where this test is of no avail that one may go to the test of fixed or circulating capital and consider whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital.
If it was part of the fixed capital of the business it would be of the nature of capital expenditure and if it was part of its circulating capital it would be of the nature of revenue expenditure.
These tests are thus mutually exclusive and have to be applied to the facts of each particular case in the manner above indicated.
It has been rightly observed that in the great diversity of human affairs and the complicated nature of business operations it is difficult to lay down a test which would apply to all situations.
One has therefore got to apply these criteria, one after the other from the business point of view and come to the conclusion whether on a fair appreciation of the whole situation the expenditure incurred in a particular case is of the nature of capital expenditure or revenue expenditure in which latter event only it would be a deductible allowance under section 10(2) (xv) of the Income tax Act.
The question has all along been considered to be a question of fact to be determined by the Income tax authorities on an application of the broad principles laid down above and the courts of law would not ordinarily interfere with such findings of fact if they have 988 been arrived at on a proper application of those principles.
The expression "once and for all" used by Lord Dunedin has created some difficulty and it has been contended that where the payment is not in a lump sum but in instalments it cannot satisfy the test.
Whether a payment be in a lump sum or by instalments, what has got to be looked to is the character of the payment.
A lump sum payment can as well be made for liquidating certain recurring claims which are clearly of a revenue nature, and on the other hand payment for purchasing a concern which is prima facie an expenditure of a capital nature may as well be spread over a number of years and yet retain its character as a capital expenditure.
(Per Mukherjea J. in Commissioner of Income tax vs Piggot Chapman & Co.(1).
The character of the payment can be deter mined by looking at what is the true nature of the asset which has been acquired and not by the fact whether it is a payment in a lump sum or by instalments.
As was otherwise put by Lord Greene M.R. in Henriksen (Inspector of Taxes) vs Grafton Hotel Ltd.(2): "The thing that is paid for is of a permanent quality although its permanence, being conditioned by the length of the term, is shortlived.
A payment of this character appears to me to fall into the same class as the payment of a premium on the grant of a lease, which is admittedly not deductible".
The case of Tata Hydro Electric Agencies Ltd., Bombay vs Commissioner of Income tax, Bombay Presidency and Aden(3) affords another illustration of this principle.
It was observed there: "If the purchaser of a business undertakes to the vendor as one of the terms of the purchase that he will pay a sum annually to a third party, irrespective of whether the business yields any profits or not, it would be difficult to say that the annual payments were made solely for the purpose of earning the profits of the business".
(1) [1949] 171.T.R. 3I7.
(3) (193 7) L. R. 64 1, A 215.
(2) 989 The expression "once and for all" is used to denote an expenditure which is made once and for all for procuring an enduring benefit to the business as distinguished from a recurring expenditure in the nature of operational expenses.
The expression "enduring benefit" also has been judicially interpreted.
Romer L.J. in Anglo Persian Oil Company, Limited vs Dale(1) agreed with Rowlatt J. that by enduring benefit is meant enduring in the way that fixed capital endures: "An expenditure on acquiring floating capital is not made with a view to acquiring an enduring asset.
It is made with a view to acquiring an asset that may be turned over in the course of trade at a comparatively early date".
Latham C. J. observed in Sun Newspapers Ltd. & Associated Newspapers Ltd. vs Federal Commissioner of Taxation(2): "When the words 'permanent ' or 'enduring ' are used in this connection it is not meant that the advantage which will be obtained will last for ever.
The distinction which is drawn is that between more or less recurrent expenses involved in running a business and an expenditure for the benefit of the business as a whole e.g "enlargement of the goodwill of a company permanent improvement in the material or immaterial assets of the concern".
To the same effect are the observations of Lord Greene M. R. in Henriksen (H.M. Inspector of Taxes) vs Grafton Hotel Ltd. (3 ) above referred to.
These are the principles which have to be applied in order to determine whether in the present case the expenditure incurred by the company was capital expenditure or revenue expenditure.
Under clause 4 of the deed the lessors undertook not to grant any lease, permit or prospecting license regarding limestone to any other party in respect of the group of quarries called the Durgasil area without a condition therein that no limestone shall be used for the manufacture of (1) (1932] 1 K.B. 124, 146.
(2) ; , 355.
126 (3) 990 cement.
The consideration of Rs. 5,000 per annum was to be paid by the company to the lessor during the whole period of the lease and this advantage or benefit was to enure for the whole period of the lease.
It was an enduring benefit for the benefit of the whole of the business of the company and came well within the test laid down by Viscount Cave.
It was not a lump sum payment but was spread over the whole period of the lease and it could be urged that it was a recurring payment.
The fact however that it was a recurring payment was immaterial, because one bad got to look to the nature of the payment which in its turn was determined by the nature of the asset which the company had acquired.
The asset which the company had acquired in consideration of this recurring payment was in the nature of a capital asset, the right to carry on its business unfettered by any competition from outsiders within the area.
It was a protection acquired by the company for its business as a whole.
It was not a part of the working expenses of the business but went to appreciate the whole of the capital asset and make it more profit yielding.
The expenditure made by the company in acquiring this advantage which was certainly an enduring advantage was thus of the nature of capital expenditure and was not an allowable deduction under section 10(2)(xv) of the Income tax Act.
The further protection fee which was paid by the company to the lessor under clause 5 of the deed was also of a similar nature.
It was no doubt spread over a period of 5 years, but the advantage which the company got as a result of the payment was to enure for its benefit for the whole of the period of the lease unless determined in the manner provided in the last part of the clause.
It provided protection to the company against all competitors in the whole of the Khasi and Jaintia Hills District and the capital asset which the company acquired under the lease was thereby appreciated to a considerable extent.
The sum of Rs. 35,000 agreed to be paid by the company to the lessor for the period of 5 years was not a revenue expenditure which was made by the company for working the capital asset which it had acquired.
It was no 991 part of the working or operational expenses of the company.
It was an expenditure made for the purpose of acquiring an appreciated capital asset which would no doubt by reason of the undertaking given by the lessor make the capital asset more profit yielding.
The period of 5 years over which the payments were spread did not make any difference to the nature of the acquisition.
It was none the less an acquisition of an advantage of an enduring nature which enured for the benefit of the whole of the business for the full period of the lease unless terminated by the lessor by notice as prescribed in the last part of the clause.
This again was the acquisition of an asset or advantage of an enduring nature for the whole of the business and was of the nature of capital expenditure and thus was not an allowable deduction under section 10(2)(xv) of the Act.
We are therefore of the opinion that the conclusion reached by the Income tax authorities as well as the High Court in regard to the nature of the payments was correct and the sums of Rs. 40,000 paid by the company to the lessors during the accounting years 1944 45 and 1945 46 were not allowable deductions under section 10(2)(xv) of the Act.
The appeal therefore fails and must be dismissed with costs.
Appeal dismissed.

summary/full:
Section 10(2)(xv) of the Indian Income tax Act, 1922, uses the term 'capital expenditure ' for which no allowance is given to the assessee.
The term 'capital expenditure ' is used as contrasted with the term 'revenue expenditure in respect of which the assessee is entitled to allowance under section 10(2) (xv) of the Act.
As pointed out by the Full Bench of the Lahore High Court in Benarsidas Jagannath, In re [(1946) it is not easy to define the term 'capital expenditure ' in the abstract or to lay down any general and satisfactory test to discriminate between a capital and a revenue expenditure.
Though it is not easy to reconcile all the decided cases on the subject, as each case had been decided on its peculiar facts, some broad principles could be 973 deduced from what the learned judges have laid down from time to time: (1)Outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment: vide Lord Sands in Commissioners of Inland Revenue vs Granite City Steamship Company ( and City of London Contract Corporation vs Styles ( (2)Expenditure may be treated as properly attributable to capital when it is made not only once and for all, but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade: vide Viscount Cave, L.C., in Atherton vs British Insulated and Helsby Cables Ltd. ([1926] If what is got rid of by a lump sum payment is an annual business expense chargeable against revenue, the lump sum payment should equally be regarded as a business expense, but if the lump sum payment brings in a capital asset, then that puts the business on another footing altogether.
Thus, if labour saving machinery was acquired, the cost of such acquisition cannot be deducted out of the profits by claiming that it relieves the annual labour bill, the business has acquired a now asset, that is, machinery.
The expressions 'enduring benefit ' or 'of a permanent character ' were introduced to make it clear that the asset or the right acquired must have enough durability to justify its being treated as a capital asset.
(3)Whether for the purpose of the expenditure, any capital was withdrawn, or, in other words, whether the object of incurring the expenditure was to employ what was taken in as capital of the business.
Again, it is to be seen whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital.
Fixed capital is what the owner turns to profit by keeping it in his own possession.
Circulating or floating capital is what he makes profit of by parting with it or letting it change masters.
Circulating capital is capital which is turned over and in the process of being turned over yields profit or loss.
Fixed capital, on the other hand, is not involved directly in that process and remains unaffected by it.
One has got to apply these criteria, one after the other from the business point of view and come to the conclusion whether on a fair appreciation of the whole situation the expenditure incurred in a particular case is of the nature of capital expenditure or revenue expenditure in which latter event only it would be a deductible allowance under section 10(2)(xv) of the Indian Income tax Act, 1922.
The question has all along been considered to be a question of fact to be determined by the Income_ tax Authorities on an application of the broad principles laid down above and the Courts of law would not ordinarily interfere with such findings of 124 974 fact if they have been arrived at on a proper application of those principles.
The assessee acquired from the Government of Assam a lease for 20 years (with a clause for renewal) in respect of certain limestone quarries situated in Khasi and Jaintia Hills.
In addition to the rents and royalties for lease the assessee as the lessee had to pay two further sums as protection fees ' under the covenants contained in clauses 4 and 5 of the lease.
Under clause 4 the portection was in respect of another group of quarries called the Durgasil area, and the lessor undertook not to grant for this area any lease, permit or prospecting licence regarding limestone to any other party except with a condition that no limestone should be used for the manufacture of cement.
This protection was given in consideration of a sum of Rs. 5,000 annually payable by the assessee during the whole period of the lease.
Under clause 5 a further protection was given by the lessor to the lessee in respect of the whole of the Khasi and Jaintia Hills District for which lessee was to pay annually Rs. 35,000 to the lessor for 5 years.
According to these covenants the assessee in his capacity as the lessee paid the lessor a sum of Rs. 40,000 for the accounting years 1944 45 and 1945 46.
Held, that the sum of Rs. 40,000 was a capital expenditure inasmuch as it was incurred for the acquisition of an asset or advantage of an enduring nature for the whole of the business and Was no part of the working or operational expenses for carrying on the business of the assesses.
Accordingly the payment of Rs. 40,000 was not an allowable deduction under section 10(2)(xv) of the Indian Income tax Act, 1922.
Countess Warwick Steamship Co. Ltd. vs Ogg [1924] 2 K.B. 292), City of London Contract Corporation vs Styles [18871 , Vallambrosa Rubber Co., Ltd. vs Farmer ( , Ounsworth (Surveyor of Taxes) vs Vickers Limited ( [19151 , Atherton vs British Insulated and Helsby Cables, Ltd. ([1925] , Usher 's case ( , John Smith & Son vs Moore (H. M. Inspector of Taxes), ( [19211 , Anglo Persian Oil Co. vs Dale ( , Golden Horse Shoe (New) Ltd. vs Thurgood (H. M. Inspector of Taxes), ( [1933]18 T.C. 280).
Van Den Berghs, Limited vs Clark (H. M. Inspector of Taxes) (I 19341 ; , Tata Hydro Electric Agencies, Limited, Bombay vs Commissioner of Income tax, Bombay Presidency and Aden ([19371 L.R. 64 I.A. 215), Sun Newspapers Ltd. and the Associated Newspapers Ltd. vs The Federal Commissioner of Taxation ([1938] 61 C.L.R. 337), Munshi Gulab Singh and Sons.
vs Commissioner of Income tax ([1945] , Commissioner of Income tax, Bombay vs Century Spinning Weaving and Manufacturing Co. Ltd. ([1946] , Jagat Bus Service Saharanpur vs Commissioner Of Income tax, U.P. & Ajmer Merwara ([1949] , Commissioner of Income tax, Bombay vs Finlay Mills Ltd., ([1952] S.C.R. 11), Commissioner of Income tax vs Piggot Chapman. & Co. 975 ( and Henriksen (Inspector of Taxes) vs Grafton Hotel Ltd. ( , referred to.
Benarsidas Jagannath, In re, ( , approved.