1960 PLP 1036 (PTD)
N/A
| Citation | 1960 PLP 1036 (PTD) |
| Forum / Court | Dacca (Pakistan) |
| Bench Members | Amiruddin Ahmad and Rahman, JJ |
| Parties | N/A |
| Primary Law | Income‑tax Act (XI of 1922) |
Q1: What are the key laws and sections cited in 1960 PLP 1036 (PTD)?
This judgment primarily cites: Income‑tax Act (XI of 1922) as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 1960 PLP 1036 (PTD)?
The case was heard and decided by the Dacca (Pakistan) bench comprising: Amiruddin Ahmad and Rahman, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 1960 PLP 1036 (PTD) (N/A). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- Radhikaranjan Guha with A. Ahad for Petitioner.
Headnotes / Summary
Ss. 34 & 42 (3)‑Raw materials purchased in Pakistan and manufactured in India --Profits attributable to purchase whether assessable in Pakistan --Inter‑Dominion Agreement, whether applicable‑Escapement of income pertaining to pre‑partition period‑Assessability in Pakistan. The assessee, a public limited Company, owned and worked several jute mills in India. It maintained a regular jute purchas ing agency in Pakistan which purchased jutes in Pakistan and sent them to the assessee in India where goods were manufac tured and sold. The Income‑tax Officer initiated proceedings under sec tion 34 and assessed to tax the income attributable to the act of purchase of jute in Pakistan. The Appellate Assistant Commissioner confirmed the assessment. Before the Tribunal the assessee contented that (i) as the process of manufacture and sale took place in India mere purchase of raw material in Pakistan could not give rise to any profit in Pakistan, (ii) in determining the place of accrual of profit the element of purchase should not come into picture at all and (iii) in any case clause 7 (a) of the Schedule to the Inter‑Dominion Agreement should be applied to this case. The Tribunal overruled all the grounds and confirmed the assessment, giving certain relief in the quantum. On a reference it was held that :‑ (i) as the assessment was of income which escaped assessment in British India, when it was in existence, and as Pakistan was a successor Government to British India in relation to that part of the country now comprised in Pakistan, income was assessable ; (ii) the purchase of raw materials was one of the processes or stages which ultimately led to the profits on the sale of the finished products and the purchase was therefore a part of the business operation within the meaning of section 42 (3) ; (iii) clause 7 (a) to the Schedule to the Inter‑Dominion Agreement for the avoidence of the double taxation of income applied only to cases of goods purchased in one dominion and sold in the other in the same condition without any manufacturing process. The jute was sold after being subjected to a manu facturing process to which clause 7 (a) of the Schedule did not apply. Chas J. Webbsons & Co. Inc., Philadelphia v. Commissioner of Income‑tax, East Punjab (1950) 18 I T R 33 and Anglo‑French Textile Company Ltd. v. Commissioner of Income‑tax, Madras (1953) 23 I T R 101 fol. Anglo‑French Textile Company Ltd. v. Commissioner of Income‑tax, Madras (1953) 23 I T R 101; Chas J. Webbsons & Co. Inc., Philadelphia v. Commissioner of Income‑tax, East Punjab (1950) 18 I T R 33 ; Gopaldas Choudhury v. Commissioner of Agricultural Income‑tax, East Bengal Ref. No. 7 of 1953 (unreported) and Krishna Kumar and Mahendra Kumar Ghosh, In re. (1931) 58 I L R Cal. 906 ref. K. B. Muhammad Ismail with Ruhul Amin for Opposite‑Party.
Judgment & Decree
AMIRUDDIN AHMAD, J.‑This reference has been made under section 66(1) of the Income‑tax Act by the Appellate Tribunal on the application of the assessee. In this reference also the judgment of the Appellate Tribunal passed on the application for reference has been made to serve the purpose of a statement of the case. As this practice in most cases serves only to create a con fusion and sometime defeats the purpose of the reference itself, it has been viewed with disfavour in a number of cases both by this Court and other Courts. The case of In re. Krishna Kumar and Mahendra Kumar Ghosh ([(1931) I L R 58 Cal. 906) and the case of Gopaldas Chowdhury v. Commissioner of Agricultural Income‑tax, East Bengal (Ref. No. 7 of 1953) disposed of by this Court are instances in point. Income applies only to cases of goods purchased in one Dominion and sold in the other in the same condition without any manufacturing process. As in the present case the jute was sold after being subjected to a manufacturing process, clause 7(a) of the said Schedule does not apply. Our answer, therefore to the second question as framed is in the affirmative. This Reference suffers from some minor defects for which the assessee is not responsible, as will appear from the judgment. We make no order as to costs. RAHMAN, J.‑I agree. Reference answered accordingly.