Commissioner Of Income-Tax, Bombay v. Ahmedbhai Umarbhai & Co., Bombay

Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) एस. सी. आर. -कर, सर्वोच्चन्यायालयकीरिपोर्टआयआयोगबॉम्बे 1959 वी. 4 मई अहेमदभाईउमरभाईएंडकंपनी।, बम्बई।[ श्रीहरिलालकनियाजी. सैयदफजलअली, पतंजलिशास्त्री, मेहरचंदमहाजन, . जे.]मुखर्जीऔरदासजे (1940 का15), एस।5 , अतिरिक्तलाभकरअधिनियमतीसराप्रावधान भारतीयआय-(1922 का11)।42 ( 3 ) —— --करअधिनियमब्रिटिशभारतकेबाहरनिर्मितवस्तुब्रिटिशभारतमेंबिक्रीक्यापूरालाभ , ब्रिटिशभारतमेंउपार्जितयाउत्पन्नहोनेवालेअतिरिक्तलाभकेलिएदेयताकरविनिर्माणसंचालनचाहेवहव्यवसायकाहिस्सा"--हो42 ( 3 ) .उत्पादनकेस्थानऔरबिक्रीकेस्थानकेबीचलाभकाविभाजनअनुमतिएसकीप्रयोज्यता। , 1940 कीधारा5 "अतिरिक्तलाभकरअधिनियममेंप्रावधानकियागयाहैकियहअधिनियमप्रत्येकव्यवसायपरलागूहोगाजिसमेंलाभकाकोईभीहिस्साहोगा।-प्रभार्यलेखाअवधिकेदौरानकियागयाआयकरकेलिएप्रभार्यथा।इसआशयकाएकपरन्तुकभीथाकियहअधिनियमकिसी, ऐसेव्यवसायपरलागूनहींहोगाजिसकासंपूर्णलाभकिसीभारतीयराज्यमेंअर्जितयाउत्पन्नहुआहोऔरजहांकिसीभारतीय, राज्यमेंकिसीव्यवसायकेकिसीभागकालाभअर्जितयाउत्पन्नहुआहोवहांइसप्रावधानकेउद्देश्यकेलिएऐसाभागएक, अलगव्यवसायमानाजाएगाजिसकापूरालाभकिसीभारतीयराज्यमेंअर्जितयाउत्पन्नहुआहोऔरव्यवसायकादूसराभागएकअलगव्यवसायमानाजाएगा। एकफर्मजोब्रिटिशभारतमेंनिवासीथीऔरइसकासंचालनकरतीथी , मूंगफलीकेतेलकेनिर्माणऔरबिक्रीकाव्यवसायब्रिटिशभारतकेभीतरकुछतेलमिलोंऔररायचूरमेंएकमिलकास्वामित्वथा। हैदराबादराज्यजहाँतेलकाउत्पादनकियाजाताथा।रायचूरमेंनिर्मिततेलआंशिकरूपसेहैदराबादराज्यकेभीतरऔरआंशिकरूपसेबॉम्बेमेंबेचागयाथाः (. जे., ,पूर्णन्यायालयद्वाराआयोजितकानियासीपतंजलिशास्त्री फजलअली, मेहरचंदमहाजन, )— धारा5 "" मुखर्जीऔरदासजेजे।केपरंतुकमेंव्यवसायकाहिस्साअभिव्यक्तिकाअर्थ-आवश्यकरूपसेव्यवसायकीसभीघटटकगतिविधियोंकीएकअलगसमग्रइकाईयापूरेव्यावसायिकसंचालनकाएकपूर्णक्रॉस, सेक्शननहींहैबल्किइसकामतलबव्यवसायकेएकयाअधिकसंचालनऔरविनिर्माणसंचालनकेलिएपर्याप्तव्यापकहै।जिसे, 5 फर्मनेरायचूरमेंचलायाथावहअधिनियमकीधाराकेपरंतुककेअर्थकेभीतरनिर्धारितीकेव्यवसायकाएकहिस्साथा।. जे., फजलअली, मेहरचंदमहाजन, . जे. - कनियासीमुखर्जीऔरदासजेकेअनुसारभीआयोजितकियागया।किव्यवसायकेउसभागकालाभ, , , अर्थात्रायचूरकीमिलमेंतेलकानिर्माणउक्तपरंतुककेअर्थकेभीतररायचूरमेंअर्जितयाउत्पन्नहुआभलेहीनिर्मिततेलबॉम्बेमेंबेचागयाथाऔरकीमतवहांप्राप्तहुईथी, औरतदनुसार, बॉम्बेमेंबिक्रीसेप्राप्तलाभकावहहिस्सा, 5 जोरायचूरमेंतेलकेनिर्माणकेलिएजिम्मेदारथाअधिनियमकीधाराकेपरंतुककेतहतअतिरिक्तलाभकरसेमुक्तथा। 42 - ए336 सर्वोच्चन्यायालयकीरिपोर्ट 1950 जे. -उप-धारा(1) कापहलाभागपतंजलिशास्त्रीकेअनुसार आय-42 , "" औरआय-करकीकरअधिनियमकीधारानिर्धारितीपरलागूहोतीथीआयुक्तब्रिटिशभारतमेंव्यावसायिकसंबंध", संपत्तियाब्रिटिशभारतमेंआयकास्रोतबॉम्बेमेंउनकेबिक्रीसंगठनकोकवरकरनेकेलिएपर्याप्तव्यापकथाऔरइसके, V कोधारा42 कीउप-धारा(3) केतहतपरिणामस्वरूपअहमदभाईरायचूरमेंनिर्मिततेलकीबिक्रीसेबॉम्बेमेंप्राप्तलाभविभाजितकियाजानाथा। , , उमरभाईऔरबिक्रीकेदोसंचालनऔरलाभकाकेवलऐसाहिस्साजोबॉम्बेमेंबिक्रीकेलिएजिम्मेदारथाकोब्रिटिशभारतमेंअर्जितयाउत्पन्नमानाजानाचाहिए।यहएकपरिणामकेरूपमेंआयाकिरायचूरमेंनिर्माणकेलिएजिम्मेदारशेषलाभकोहैदराबादराज्यमेंउपार्जितयाउत्पन्नहोनेवालामानाजानाचाहिएऔरइसलिएएसकेपरंतुककेतहतछूटटदीगईथी।5 अधिनियमसे। सवालहैःचाहेवहव्यावसायिकसिद्धांतोंकेअनुरूपहोयाउसप्रभावकेलिएकिसीभीवैधानिकआवश्यकताकेअभावमेंव्यावसायिकसंचालनकोमनमानेढंगसेदोयादोसेअधिकराज्योंमेंविभाजितकरनेऔरबिक्रीमेंसमाप्तहोनेवालीएकनिरंतरप्रक्रियाकेपरिणामस्वरूपहोनेवालेलाभकोउनकेबीचविभाजितकरनेकेलिएऔरक्याकिर्ककामामलाभारतीयअधिनियमोंकेतहतमूल्यांकनपरलागूहोताहैजोविभाजनकेकिसीभीसामान्यसिद्धांतकोनिर्धारितकरताहै। Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) S.C.R. SUPREME COURT REPORTS COMMISSIONER OF INCOME-TAX, BOMBAY v. AHMEDBHAI UMARBHAI & CO., BOMBAY. [SHRI HARILAL KANIA G~ SAIYID F AZL ALI, PATANJALI SASTRI, MEHR CHAND MAHAJAN, MUKHERJEA and DAS JJ.] E.vcess Prnjits Tax Act (XV of 1940), s. 5, Third Pt·oviso-Indian Incom$-tax Act (XI of 1922), s. 42 (8)-Article manufactttred otttside British India-Sale in British India-Whethu whole profits accriie or arise in British India-Liability to excess pt·ofits tax-Manufacturing operations, whether "part of !msiness " - Aprortion-ment of profits between place of mamifact11re and place of sale-Permissibility-Applicability r>f s. 42 (8}. Section 5 of the Excess Profits Tax Act, 1940, provided that "the Act shall apply to awry business of which any part of the profits made during the chargeable accounting period was chargeable to income-tax." There was also a proviso to the effect that "the Act shall not apply to any business, the whoie of the profits of which accrued or arose in an Indian State and that where the profits of a part of a business aoorued or arose in an Indian State, such part shall for the purpose of this provision be deemed to be a separate business, the whole of the profits of which accrued or arose in an Indian State, and the other part of the business shall be deemed to be a separate business." A firm which was resident in British India and carried on the business of manufacturing and selling groundnut oil, owned some oil mills within British India and a mill in Raichur in the Hyderabad State where oil was manufactured. The oil manufac· tured in Raichur was sold partly within the State of Hyderabad and partly in Bombay : Helil,. lnJ the Fitll Com·t (KANIA C. J., PATANJALI SASTRI, FAZL ALI, MEHR CHAND MAHA.JAN, MUKHERJEA and DAS JJ.)-The expression "part of a business" in the provieo to section 5 does not necessarily mean a separate composite unit of all the constituent activities of the business or a complete cross·section of the entire business operations but is wide enough to mean one or more of the operations of the business, and that the manufacturing operations which the firm carried on at Raichur were "a part of tho business" of the assessees within the meaning of the proviso. to section 5 of the Act. Held also pe1· K~NIA C .. J., FAZL ALI, :\IEHH CHAND l\LULUAN, l\11.."KHEHJEA and DAS J.J.-that the profits of that part of the business, namely, the manufacture of oil at the mill in Raichur accrued or arose in Haichur within the meaning of the said proviso, even though Lhe manufactured oil was sold in Bombay and the price was received there, and accordingly, that part of the profits derived from sales in Bombay which was attributable to the manufacture of the oil in Haichur was exempt from excess profits tax nnder the proviso to section 5 of the Act. ~2-A 195fl May 4 1950 Co111111issio1tcr of /Jtco1uc-tax, Bo111fJay v. Aluucdbhai U111arbhai & Co. 336 SUPREME COURT REPORTS [1950) Per P.\TANJALI SAS TRI J.-The first part of sub-section (1) of section 42 of the Income-tax A.ct was applicable to the assessees, the expressions "business connection in British India" and '"asset or source of income in British India'' being wide enough to cover their selling organisation at Bombay ; and as a xesult, the profits received in Bombay from the sale of the oil manufactured in Haichur had to be apportioned under sub-section (3) of section 42 bet\veen the two operations of manufacture and sale, and only such portion of the profits as was attributable to the sale in Bombay should he deemed to have accrued or arisen in British India. It followed as a corollary that the rest of the profits attributable to the 1nanufacture at Raicbur rnust he regarded as accruing or arising in the Hyderabad State and w~s therefore exempt under the proviso to s. 5 of the Act. Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) !"#$%&,'(%!#)*+!,, -.-/ pBkw 01#234/'5#&34/'n?Av'!.6%7, -.-/8 (w[Zy iZi $97'1&7:4:'!4%7;, iZi ,+<2'=>:'0:7, iZi 6?.@:7'$4,?97, iZi #/1&'A.2'#14@%, iZi #BC&@7'0?D'iZi 24,) E!,+,'69F"G*,'*+!,'E!*'H15 ;G'1940), I4&4 5, ?7@4'T[gpzX )'34&?7'(%!#)*+!,'E!*'H11 ;G'1922), I4&4 42 (3) "-9"*$'34&?'))?J'-41&'"%&"#?'5?642"-9"*$'34&?'"KA'"K!&7!7',4&D'#B%4GD'"-9"*$'34&?'"KA'17'fJeZm/'@4L'6+24'j'J/ 1%)E!,+,'69F"G*,'*+!,'27'">.#DK4&7)eh "%&#4M'!4&@ “K64&'24'"1N,41%”')'"%&#4M',O4%'0?D'"K!&7'2D'/z,O4%'"KA!4&'#B%4='27'K.P')(; dh''#%>Q&h )I4&4 42 (3) 2k bkr{ j'Dk8 E!,+,'69F"G*,'*+!,'E!*, 1940 2hI4&45 "KA'(1'694KI4%',7' "! “(1' E!*' 1&' 5,' !4&F-4&' 5?D' :4RQ' 1FKDR4' "@,' 2D' !BS' #B%4GD'A4&i:'r b/yk ntXh 2T&4%'(%!#)*+!,'2D':/'N?e;:'r ,%.(,'2D'%4:'17'(N!'T[gpzX K7',7'"@,'24'0,&'(1',7'"!“(1'E!*'5,'!4&F-4&?D':4RQ'%1U'1FKDR4, "@,'2D',4&D'#B%4GD'"!,D'34&?7'&4@'"KA'fJeZm/'@4L'6+24'1FV'1FM'0?D'"@OD'!4&F-4&'2D'!BS'"1N,D'2D'#B%4GD'"!,D'34&?7'&4@'"KA'fJeZm/@4L'6+24'1FV'1FM, 0"@14'"1N,4'(,'694KI4%'2D'52D$':/'(N!'0:NR'!4&F-4&'#."%;'@4KDR4, "@,'2D',4&D'#B%4GD'"!,D'34&?7'&4@'"KA'fJeZm/ @4L'6+24'1FV'1%, 0?D'!4&F-4&'24'2Q@4'"1N,4'(N!'0:NR'!4&F-4&'#."%;'@4KDR48 (N!'G&#'@F'"-9"*$'34&?'ftZu ;fEs ,7'0?D'#Q.RG:7'2D'?D:'2D'"%&#4M'0?D'"K!&7'24'!4&F-4&'!&27',7, 5,'!F:'"-9"*$'34&?'"KA'!BS'?D:'"#:4L',%'0?D'1+2&4-42';N/N 2D'&4(AQ&'"KA'(!'"#:',7, "@OD'?D:'"%&"#?'!7?4'@4L24',78'&4(AQ&'"KA'"%&"#?'?D:';L"$!'?T&?D'1+2&4-42'&4@'"KA'0?D';L"$!'?T&?D'-.-/'"KA'KD"A;'"R;'W c[Zb e"oN tb'A fJj c?;bk ehsk frnk Hw[Zy iZi !4%7;, iZi /6?.@:7'$4,?97, iZi =>:'0:7, iZi #1&'A.2'#14@%, iZi #BC&@7'0?D'iZi 24,X')'I4&4 5 d/ T[gpzX ftZu fJj Ppdktbh“!4&F-4&'24'"1N,4” dk @&Q&7'?T&'?D'fJj wsbp BjhA j? fe tZyo/ ;z:[es fJekJh d/ !4&F-4&'27;L',4&7;L';zxNe R?7"KI7;L'@4L';k&D'!4&F-4&7'!4&@4L'24'6Q&4'!&k,),+!$%'1B.2k j't/, 6&'(1'(,'RN:'27'6"&34$4'2DM':/'!4=7'ftnkge'1+'"!'(1'!4&F-4&'2D'(N!'@4L'1F&'!4&@4L'%Q.'2&,4Y24'1+, 0?D'51'"%&#4M'!4&@'@F'G&#'%D'&4(AQ&'"KA'!7?D',%, n?eN dh I4&4 5 d/ T[gpzX d/ wsbp nB[;ko fJj eodksktK d/ “!4&F-4&'24'"1N,4” ,%8 j'&'K7' c?;bk ehsk frnk Hw[Zy iZi !4%7;, iZi 6?.@:7'$4,?97, iZi =>:'0:7, iZi #/1&'A.2'#14@%, iZi #BC&@7'0?D'iZi 24,X')'5!?'T[gpzX 2D'#?:-'0%B,4&'!4&F-4&'2D'5,'"1N,D'2D'#B%4GD, 34K, i' &4(AQ&'"KA'"#:'"KA'?D:'2D'"%&#4M'2D ekoD, &4(AQ&'"KA'@#4'@4L'6+24'1FV, 34KZ'"%&"#?'?D:'-.-/'"KA'KD"A;'"R;',7'0?D'!7#?'5[OD'6946?'!7?7'R/',7, 0?D'(,'?&\4L, -.-/'"KA'"K!&7;L'?J'6946?'51'"1N,4'@F'&4(AQ&'"KA'?D:'2D'"%&#4M'%4:'@B"];',7, E!*'2hI4&45 2D'T[gpzX 0I7%'E!,+,'69F"G*,'*+!,'?J'T[;B{z ^F*',78 iZi 6?.@:7'$4,?97'0%B,4&)'(%!#)*+!,'E!*'2D'I4&442 2h56)'I4&4'H1) 24'6"1:4'34R'!&dk?4K4L'?D':4RQ',7, PpdktbhnK “"-9"*$'34&?'"KA'!4&F-4&7',.-.I” 0?D “"-9"*$'34&?'"KA',.6?7'@4L';#2%'24',&F?” -.-/'"KA'5%\4L'2D'"K!&7',.R_%'%Q.'!K&'!&%':/'!4=7'ftnkge ,%0?D'(,'?&\4L, &4(AQ&'"KA'"%&"#?'?D:'27'-.-/'"KA'"K!&7'?J'6946?'#B%4=4',+!$%'42 2D'56)'I4&4'H3) 0I7%'"%&#4M'0?D'"K!&7'2D'2F'!4&@4L'"KA!4&'K.PM4'6KDR4, 0?D'!DK:'0"@14'"1N,4'@F'-.-/'"KA'"K!&7'%4:'@B"];',7, 5,%Q.'"-9"*$'34&?'"KA'fJeZm/ @4L'6+24'1FM'K@J'#."%;'@4KDR48'(,'24'%?7@4'(1',7'"!'-4!7'#B%4=4'@F'&4(AQ&'"KA'T[sgkdB '%4:'@B"];',7, 5,%Q.'1+2&4-42'&4@'"KA'fJeZm/ @4L'6+24'1FM'K@J'#."%;'@4KDR4'0?D'(,':/'E!*'2hI4&45 2D'T[gpzX'0I7%'fJ;dh ^F*'1FKDRh8 69$%W'!7'fe;/ ekB{zBh b'V dh R+&14>&7'"KA'(1'!4&F-4&7'",I4L?4L'@4L'0#:'%4:'#D:'C4L24'1+'"!'!4&F-4&7'!4&@4L'%Q.'#%#4%D'?T&''?D'2F'@4L'1F&'"1N",;L'"KA'!N*'!D'0?D'5%\4L'"KA!4&'(!':R4?4&'69"!"&;'2D'%?7@D'Ki'A"K!&7'?J'#B%4=4'K.PM4'1+'0?D'!7'"!&!'24'!D,'34&?7'ekB{zBK 2D'0I7%'"!,D';#'tzv bJh ",I4L?'2D'&Q6'"KA#B:4L!M4L':/'T[gbpX 1+8 iZi #14@%'0%B,4&)34KZ'#B%4=4'T[d'A ?!'14",:'%4'j[zdk 1FKD'@2'?!'!F/'"%&"#?'A7>'%Q.'KD"A;'%4'@4KD, #B%4=4'6Q&7'?&\4L'"K!&7'2D'!.#'%4:'%1U'-M24'0?D'%4'17'>&Q&7'1+'"!'"K!&7'27'@R\4?D'17'fJeZmk 1FKD'0?D'"@,'1N2'?N!'#B%4=4'"%&#4M'!4&@4L'%4:'@B"];'1FKD, #B%4=4'5,'@R\4'?D'@#4'1FKDR4'"@OD'51'!4&@'!7?D'@4L2D'1%8 Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) सवालहैःचाहेवहव्यावसायिकसिद्धांतोंकेअनुरूपहोयाउसप्रभावकेलिएकिसीभीवैधानिकआवश्यकताकेअभावमेंव्यावसायिकसंचालनकोमनमानेढंगसेदोयादोसेअधिकराज्योंमेंविभाजितकरनेऔरबिक्रीमेंसमाप्तहोनेवालीएकनिरंतरप्रक्रियाकेपरिणामस्वरूपहोनेवालेलाभकोउनकेबीचविभाजितकरनेकेलिएऔरक्याकिर्ककामामलाभारतीयअधिनियमोंकेतहतमूल्यांकनपरलागूहोताहैजोविभाजनकेकिसीभीसामान्यसिद्धांतकोनिर्धारितकरताहै। जे. महाजनकेअनुसार-यद्यपिलाभतबतकप्राप्तनहींकियाजासकताहैजबतककिएकनिर्मितवस्तुनहींबेचीजातीहै, लाभपूरीतरहसेबिक्रीकेअधिनियमद्वारानहींकियाजाताहैऔरबिक्रीकेस्थानपरआवश्यकरूपसेअर्जितनहींहोताहैऔर, जिसहदतकलाभविनिर्माणसंचालनकेलिएजिम्मेदारहोतेहैंलाभउसस्थानपरजमाहोतेहैंजहांसंचालनकियाजाताहै।.-, प्रतिमुखर्जीजेजहाँकच्चेमालकोनिर्माणकीप्रक्रियाद्वाराएकनएउत्पादमेंकामकियाजाताहैतोयहस्पष्टरूपसेमूल्यमें, यहलाभवृद्धिकरताहैऔरमूल्यमेंयहवृद्धिआययालाभकाप्रतिनिधित्वकरतीहैजोनिर्माणकापरिणामहैऔरक्योंकि, निर्माणकेकारणअर्जितहोताहैयहउसस्थानपरस्थितनहींहोसकताहैजहाँसेविनिर्माणप्रक्रियागुजरतीहै।यहकोईमायने, नहींरखताकिनिर्मितवस्तुओंकोबादमेंविभिन्नस्थानोंपरबेचाजाताहै।यदिनिर्मातास्वयंविक्रेताहैतोयहहोसकताहैकिवहकेवलउत्पादसहितपूरालाभप्राप्तकरताहै।; , बिक्रीकासमयलेकिनअसंबद्धरूपमेंलाभकाएकहिस्सानिर्माणकेस्थानपरजमाहोताहैजिसकीसहीराशिबिक्रीहोनेके-बादहीपताचलतीहै।अनुमानकेप्रयोजनोंकेलिएव्यवसायकेदोभागोंकोदोअलगअलगसमूहोंद्वारासंचालितकियाजारहाहै। अपील[1949 काLXVIII] सेसिविलअपीलसं। 18 तारीखकोबॉम्बेउच्चन्यायालयकाएकनिर्णय 1948 (चागलासी. जे. औरजे. ) मार्चतेंदुलकरएकसंदर्भमें, 1940 केअधीन।अतिरिक्तलाभकरअधिनियम एम. सी. , (बी. सेन)सीतलवाड़भारतकेमहान्यायवादी उसकेसाथ) अपीलार्थीकेलिए। के. एम. मुंशी(एस. के. अय्यरऔरएन. के. गमाडिया) उसकेसाथ) उत्तरदाताओंकेलिए। 1950. 4 मई।न्यायालयनेनिम्नलिखितआदेशदिएः निर्णयः एस. सी. आर. सर्वोच्चन्यायालयकीरिपोर्ट . जे. 66 (1) , केनियासीयहभारतीयआयकरअधिनियमकीधाराकेतहतआयकरअपीलीयन्यायाधिकरणबॉम्बेद्वारादिएगए, , केदौरानतेलकेएकसंदर्भपरबॉम्बेमेंउच्चन्यायालयकेफैसलेकीएकअपीलहै।प्रत्यर्थीफर्मनिर्धारितीसंबंधितलेखाअवधिनिर्माणऔरलेनदेनकाव्यवसायकरतीथी।वेआयकरअधिनियमकेतहतएकपंजीकृतफर्महैंऔरबॉम्बेमेंनिवासीहैं।उनकेपासमूंगफलीसेतेलबनानेकेलिएबॉम्बेमेंतीनऔररायचूरमेंएकमिलहै।रायचूरमेंउत्पादिततेलआंशिकरूपसेरायचूरमेंऔरआंशिकरूपसेबॉम्बेमेंबेचाजाताहै।अपनेपूरेलाभकेसंबंधमेंआयकरकाभुगतानकरनेकाउनकादायित्वआयकर, अधिनियमकेतहतविवादितनहींहै।सवालरायचूरमेंनिर्मितलेकिनबॉम्बेमेंबेचेजानेवालेतेलकेलिएअतिरिक्तलाभकरअधिनियमकेतहतउनकीदेनदारीकेसंबंधमेंहै।आकलनकर्ताओंकातर्कहैकिऐसेतेलकेसंबंधमेंउनकेद्वाराअर्जितलाभकाएकहिस्सारायचूरमेंतेलनिर्माणकेउनकेव्यवसायकेलिएजिम्मेदारहैऔरलाभकेउसहिस्सेकाआकलनअतिरिक्तलाभकरअधिनियमकेतहतकरकेलिएनहींकियाजानाचाहिए।करलगानेवालेलेखकनेनिर्धारितीकेतर्ककोखारिजकरदिया।आय-करन्यायाधिकरणउनसेसहमतथा।एकसंदर्भपरउच्चन्यायालयनेट्रिब्यूनलकेदृष्टिकोणसेअसहमतिजताईऔरकहाकि2 निर्धारकोंकातर्कसहीथा।आयकरआयुक्तनेउसफैसलेकेखिलाफअपीलकीहै।अतिरिक्तलाभकरअधिनियमकीधारा(5) "" '' , मेंव्यवसायकोनिम्नानुसारपरिभाषितकियागयाहैःव्यवसायमेंकोईभीव्यापारवाणिज्ययाव्यवसायशामिलहै। 1950 कमिश्नर आय-कर, बॉम्बे वी. अहमदभाई उमरभाईएंडकंपनी। . जे.कनियासी , व्यापारवाणिज्ययानिर्माणकीप्रकृतिमेंनिर्माणयाकोईसाहसिककार्य। , बशर्तेकिवेसभीव्यवसायजिनपरयहअधिनियमलागूहोताहैएकहीव्यक्तिद्वाराकिएजाएंगे "5. इसअधिनियमकेप्रयोजनोंकेलिएएकव्यवसायकेरूपमेंमानाजाताहै।यहअधिनियमउसप्रत्येकव्यवसायपरलागूहोगाजिसकेलाभकाकोईभीहिस्साप्रभार्यअवधिकेदौरानकियागयाहो। 5 अधिनियमकीधाराइसप्रकारहैः लेखाअवधिभारतीयआय-करअधिनियम, 1922 कीधारा4 कीउप-धारा(1) केखंड(बी) केउप-खंड(आई) याउप-खंड(आई) याउसउप-धाराकेखंड(सी) केप्रावधानोंकेआधारपरआय-करसेप्रभार्यहैः बशर्तेकियहअधिनियमकिसीपरलागूनहींहोगा व्यवसायजिसकापूरालाभअर्जितहोताहैया [1950]सर्वोच्चन्यायालयकीरिपोर्ट 338 1950 ब्रिटिशभारतकेबिनाउत्पन्नहोताहैजहांऐसाव्यवसायहै निवासीव्यक्तिद्वारायाउसकीओरसेकियागया कमिश्नर लेकिनब्रिटिशभारतमेंसामान्यरूपसेनिवासीनहींहैजबतककि आय-कर, भारतमेंव्यवसायनियंत्रितहैः बॉम्बे बशर्तेकिजहाँकिसीभागकालाभ अहमदभाईकेवलएकऐसेव्यक्तिद्वाराचलाएजानेवालेव्यवसायकेहैंजोउमरभाईएंडकंपनीनहींहै। ब्रिटिशभारतमेंनिवासीयासामान्यरूपसेनिवासीनहीं . जे.कनियासीब्रिटिशभारतमेंजमायाउत्पन्नहोतेहैंयाइसकेतहतमानेजातेहैं भारतीयआय-, 1922, , करअधिनियमताकिअर्जितकियाजासकेयाउत्पन्नकियाजासकेइसकेअलावाजहांव्यवसायकिसीऐसेव्यक्तिकाव्यवसायहैजोनिवासीहैलेकिनसामान्यरूपसेनिवासीनहींहै। Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) iZi #14@%'0%B,4&)34KZ'#B%4=4'T[d'A ?!'14",:'%4'j[zdk 1FKD'@2'?!'!F/'"%&"#?'A7>'%Q.'KD"A;'%4'@4KD, #B%4=4'6Q&7'?&\4L'"K!&7'2D'!.#'%4:'%1U'-M24'0?D'%4'17'>&Q&7'1+'"!'"K!&7'27'@R\4?D'17'fJeZmk 1FKD'0?D'"@,'1N2'?N!'#B%4=4'"%&#4M'!4&@4L'%4:'@B"];'1FKD, #B%4=4'5,'@R\4'?D'@#4'1FKDR4'"@OD'51'!4&@'!7?D'@4L2D'1%8 iZi #BC&@7'0%B,4&)@2J'!NA4'#4:'"%&#4M'27'69"!"&;'2B;&4'%KU'5?642'"KNA'?-27:'1B.24'1+, ?4L',6N$*'?T&'?D' fJ; dk #BN:'KI24'1+'0?D'(1'K4I4'#B%4=4'@4L';#2%'27'%B#4(.2R7'!&24'1+'@F'"%&#4M'24'%?7@4'1+, 0?D'AQ."!'(1'#B%4=4'"%&#4M'2D'!4&%'@#4'1B.24'1+, (,':/'(,%Q.'5,'@R\4'?D',"O?'!7?4'@4M4'A41724'1+'"@OD'"%&#4M'69"!"&;'0.@4#'"2N?7'@4L27'1+8'(1'#1N?K6Q&M'BjhA 1+'"!'"%&"#?'#4:'-402'"KNA'KNC)KNC'EktK'?D'KD"A;'@4L24'1+8'@D'"%&#4?4'CB2'"K!&D?4'1+, ?4L'1F',!24'1+'"!'51',4&D'#B%4GD',#D?'"%&#4M'24'#B%4=4'!DK:'"K!&7'2D',#Z'17'6946?'!&D6&'0IQ&D'&Q6'"KNA'!BS'#B%4=4'"%&#4M'27'@R\4'?D'th g?dk 1B.24'1+, "@,'27',17'&!#'",&G'"K!&7'2D'-402'17'6?4':NR27'1+8'RM%4'2D'52D$4L':/'!4&F-4&'2D'2F'"1N",;L'%Q.'2F'KNC&D'soK'2D':F!4L'2B;&4'A:4V'@4L2D'1FM'27'!:6%4'!7?7'@4',!27'1+8 067:'(",t:'067:'%.-& 68 ;G'1949) E!,+,'69F"G*,'*+!,'E!*, 1940 0I7%'(!'&+G&`,'"KNA-.-/'14/'!F&*'2D'18 #4&A'1948 27'?4&7C'K4:D'G+,:D'd/ fybkc'Hw[Zy iZi A4R:4'0?D'iZi szd':!&X'8E#a',7a',h?:K42, 34&?'2D'0*4&%7)@%&:, (-7a',D%'T[BQK %4:X'067:!4&?4':/8 e/H E#a'#B.B$7'HE,a'!Da'0(<&'0?D'E%a'!Da'R4#4P7;'T[BQK %4:X'69"?K427;L':/84 #/, 1950 B{z 024:?'%D'1D_'":C?'G+,:D'"2N?DW) w[Zy iZi !4%7;')(1'(N!'067:'-.-/'27'5A'024:?'2D'T[; G+,:D' pko/ j? @F' (.P70%' (%!#)*+!,' E!*' 2h I4&4 66 (1) 0I7%'(%!#)*+!,'0?67:D*'"*9"-b%:, -.-/'2B;&4'!7?D'RV'&+G&`,'?D'0I4"&?'1+8'69"?K427'G&#, i' !&dk?4 jB, T[j ,-."I?'b/yk "#;2'2T&4%'?D:'2D'"%&#4M'0?D'T[;d/ K64&'"KNA'!4&F-4&'!&2D',%8'51'fJZe (%!#)*+!,'E!*'0I7%'&"@,*&P'G&#'1%'0?D'-.-/'"KNA'&"1.2D'1%8'51%4L'!F:'-.-/'"KNA'"?.%'"#:4L'1%'0?D fJZe fwb'&4(AQ&'"KNA'j?, "@OD'51'#Q.RG:7'?J'?D:'"%&"#?'!&2D'1%8'&4(AQ&'"KNA'"%&"#?'?D:';L"$!'?T&'?D'&4(AQ&'"KNA'0?D';L"$!'?T&'?D'-.-/'"KNA'KD"A;'@4L24'1+8'5%\4L'2D',4&D'#B%4=D'5?D'(%!#)*+!,'3&%'27'">.#DK4&7'24'(%!#)*+!,'E!*'0I7%'e'Jh "K&FI'%1U'1+8',K4:'(1'1+'"!&4(AQ&'"KNA'"%&"#?'?D:, @F'-.-/'"KNA'KD"A;'"R;',7, eh 5%\4L'27'E!,+,'69F"G*,'*+!,'E!*'0I7%'">.#DK4&7'pDdh j?8 eodksktK 24'?&!'(1'1+'"!'0"@1D'?D:'2D',-.I'"KNA'5%\4L'2B;&4'!#4V' RV' #B%4GD' 24' (N!' "1N,4' 5%\4L' 2D' &4(AQ&' "KNA'?D:' 2D' "%&#4M' 2D'!4&F-4&'%4:'@B"];'1F(;'1+'0?D'5,'#B%4=D'2D'"1N,D'%Q.'E!,+,'69F"G*,'*+!,'E!*' 0I7%' *+!,' :/' 0,+[,' %1U' !7?4' @4M4' A417248' *+!; brkT[D tkbhnK 0O4&*7;L'%D'eodksk 2D'?&!'%Q.'&N2'!&'"2N?48'(%!#)*+!,'"*9"-b%:' %D' 5%\4L' %4:' ,"1#?7' @?4/8' &+G&`, eoB ?D' 14/' !F&*' %D'"*9"-b%:'2D'"KA4&'%4:'0,"1#?7'@?4/'0?D'eodksk 2D'?&!'%Q.',17'#."%;8' (%!#)*+!,' 2D' !"#$%&' %D' 5,' G+,:D' fybkc 067:' !7?7' 1+8'E!,+,'69F"G*,'*+!,'E!*'2hI4&42 (5) "KA'!4&F-4& B{z (,'?&\4L'6"&34"$?'!7?4'"R;'1+W')“!4&F-4&"KA'!F/'K7'K64&, KM@'@4L'"%&#4M'@4L'K64&, tDi @4L'"%&#4M'27'"!,#'24'!F/'K7',41,h nwb'$4"#:'1+aaaaa' pPos/ 1F&'"!'(,'E!*'2D'0I7%':4RQ'1FM'K4:D',4&D'!4&F-4&'@F'(N!F'"K0!?7'2B;&4'A:4V'@4L2D'1%, (,'E!*'2D'52D$4L':/'(N!'!4&F-4&'K@J'#.%D'@4MRD8c E!*'2hI4&45 "KA'(,'?&\4L'":"C;'"R;'1+W') “5H (1'E!*'1&'5,'!4&F-4&'5?D':4RQ'1FKDR4'"@,'2D'!BS'"1N,D'24' B%4=4'A4&@:'rb/yk no;/ 2T&4%'34&?7'(%!#)*+!,'E!*, 1922 2h I4&44 2h'56)'I4&4'H1) 2D'yzv'H-7X'2D'56)yzv'H1X'@4L'56)yzv'H2X'2D'694KI4%4L'2D'@4L'5,'56)'I4&4'2D'yzv'H,7X'2D'0I4&'?D'(%!#)*+!,':/'ukoi:'r 1+W pPos/ "!'(1'E!*'5,'!4&F-4&'?D':4RQ'%1U'1FKDR4'"@,'2D',4&D'#B%4=D'"-9"*$'34&?'?J'-41&'fJeZm/ @4L'6+24'1B.2D'1%, @D!&'0"@14'!4&F-4&'"!,D'nfij/ "K0!?7'2B;&4'@4L'5,27'?&GJ'!7?4'@4L24'1+'@F'"-9"*$'34&?'"KNA'&"1.24'1+'6&',I4&M'?T&'?D'T[E'A dk "%K4,7'%1U'1+, @d'A'?N!'"!'!4&F-4&'34&?'"KNA'"%<."?9?'%4'ehsk iKdk 1FKDW Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) Q~tae9·e: \Vhether it is in consonance with business principles or prA.ctice in the absence of any statutory requirement to that effect to cut business operations arbitrarily into two or more por .. tions and to 11pportion as between the1n the pro5Js resulting frorn one continuous process ending in a sale and \vhether Kirk's case is applicable to assessments under the Indian Acts as laying down any general principle of apportionment. Per MAHAJAN J.-Though profits may not be realised until a manufactured article is sold, profits are not wholly made by the act of sale and do not necessarity accrue a.t the place of sale a.nd to the extent profits are attributable to the manufacturing operations, profits accrue at the place where the operations are carried on. Per :i\fUKHERJEA J.-\Vhere raw material is worked up into a new prorluct by process of manufacture, it obviously increases in value and this increase in value represents the income or profit which is the result of the 1nanufacture, and a.s this profit accrues by rea.son of the tnanufacture it cannot but be locn.ted at the place \Vhere the inanufacturing process is gone through. It is im1naterial that the manufactured goods are sold later on at various places. If tho manufacturer is himself the seller, it might be that he receives the entire profits including that of the manufacture only at the tin1e of sale; but in an inchoate shape a portion of the profits does accrue at the pln.ce of manufacture, the exact a1nount of which is only n.scertrdned after the Sale takes place. For purposes of com· pntation the two parts of the business may be conceived of e.s being carried on by two different sets of persons. APPEAL [Civil Appeal No. LXVIII of 1949] from a Judgment of the High Court of Bombay dated 18th l\Iarch 1948 (Chagla C.J. and Tendolkar J.) in a Refer-ence under the Excess Profits Tax Act, 1940. JYI. C. Setalvad, Attorney-General for India, (B. Sen with him) for the appellant. ICM. JY!unshi (S. K. Aiyar and N. K. Gamadia with him) for the respondents. 1950. )lay 4. The Court delivered the following Judgments:- S.C.R. SUPREME COURT REPORTS 337 KANIA C.J .-This is an appeal from a decision of the High Court of Judicature at Bombay upon a refer-ence made by the Income-tax Appellate Tribunal, Bombay, under section 66 ( 1) of the Indian Income-tax Act. The respondent firm, the assessees, carried on business of manufacturing and dealing in oil during the relevant accounting periods. They are a registered ' firm under the Income-tax Act and are residents in Bombay. They own three mills at Bombay and one at Raichur for manufacturing oil from groundnuts. The oil produced at Raichur is sold partly at Raichur and partly in Bombay. Their liability to pay income-tax in respect of their whole profits is not disputed under the Incom~-tax Act. The question is in respect of their liability under the Excess Profits Tax Act for the oil manufactured at Raichur, but sold in Bombay. The assessees contend that in respect of such oil a portion of the profits earned by them is o.ttributable to theipbusiness of manufacturing oil at Raicbur and that portion of the profits should not be assessed to tax under the Excess Profits Tax Act. The taxing author-ities rejected the contention of the assessees. The Income-tax Tribunal agreed with them. On a reference the High Court disagreed with the view of the Tribu-nal and held that the assessees' contention was correct. The Commissioner of Income-tax has come in appeal from that decision. In the Excess Profits Tax Act, section 2 (5) defines "business" as follows :- "'Business' includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture ..... . Provided further that all businesses to which this Act applies carried on by the same person shall be treated as one business for the purposes of this Act." Section 5 of the Act runs as follows :-· "5. This Act shall apply to every business of which Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) "'Business' includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture ..... . Provided further that all businesses to which this Act applies carried on by the same person shall be treated as one business for the purposes of this Act." Section 5 of the Act runs as follows :-· "5. This Act shall apply to every business of which any part of the profits made during the chargeable accounting period is chargeable to income-tax by virtue of the provisions of sub-clause (i) or sub-clause (ii) of clause (b) of sub-section ( 1) of section 4 of the Indian Income-tax Act, 1922, or of clause (c) of that sub-section: Provided that this Act shall not apply to any business the whole of the profits of which accrue or 1950 Co1n1nissioncf' of Inconie-tax 1 Bombay v. All11iedbhai V111arbliai & Co. :cania C. J. ]950 Co111111 issio1£cr of lncotne-tax, Bo111bay , .. Altuzedbl1ai Umarb/iai & Co. l(ania CJ. 338 arise without British India where such business is carried on by or on behalf of a person who is resident but not ordinarily resident in British India unless the business is controlled in India : Provided further that where the profits of a part only of a business carried on by a person who is not resident in British India or not ordinarily so resident , accrue or arise in British India or are deemed under the Indian Income-tax Act, 1922, so to accrue or arise, then except where the business being the business of a person who is resident but not ordinarily resident in British India is controlled in India, this Act shall apply on! y to such part of the business, and such part shall for all the purposes of this Act be deemed to be a separate business : Provided further that this Act shall not apply to any business the whole of the profits of which accrue or arise in an Indian State ; and where the profits of a part of a business accrue or arise in an Indian State, such part shall, for the purposes of this provision, be deemed to be a separate business the whole of the profits of which accrue or arise in an Indian State, and the other part of the business shall for all the purposes of this Act, be deemed to be a separate. business." Section 21 of the Act, which was not referred to in the course of the arguments before us, runs as follows:- " 21. The provisions of sections 4-A, 4-B, 10, 13, 24-B, 29, 36 to 44-C (inclusive), 45 to 48 (inclusive), 49-E, 49-F, 50, 54, 61 to 63 (inclusive), 65 to 67-A (inclusive) of the Indian Income-tax Act, 1922, shall apply with such modifications, if any, as may be prescribed as if the said provisions were provisions of this Act and referred to excess profits tax instead of to income-tax, and every officer exercising powers under the said provisions in regard to income-tax may exercise the like powers under this Act in regard to excess profits tax in respect of cases assigned to him under sub.section (3) of section 3 as he exercises in relation to income-tax under the said Act : Provided that references in the said provisions to the assessee shall be construed as references to a person to whose business this Act applies." S.C.R. SUPREME COURT REPORTS 339 The relevant portion of section 42 of the Indian Income-tax Act is in these terms :- " 42. (1) All income, profits or gains accruing or arising, whether directly or indirectly, through or from any business connection in - British India, or through or from any property in British India, or through or from any asset or source of income in British India, or through or from any money lent at interest and brought into British India in cash or in kind, shall be deemed to be income accruing or arising within British India, and where the person entitled to the income, profits or gains is not resident in British India, shall be chargeable to income-tax either in his name or in the name of his agent .... (2) Where a person not resident or not ordinarily Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) I4&44 2h'56)'I4&4'H1) 2D'yzv'H-7X'2D'56)yzv'H1X'@4L'56)yzv'H2X'2D'694KI4%4L'2D'@4L'5,'56)'I4&4'2D'yzv'H,7X'2D'0I4&'?D'(%!#)*+!,':/'ukoi:'r 1+W pPos/ "!'(1'E!*'5,'!4&F-4&'?D':4RQ'%1U'1FKDR4'"@,'2D',4&D'#B%4=D'"-9"*$'34&?'?J'-41&'fJeZm/ @4L'6+24'1B.2D'1%, @D!&'0"@14'!4&F-4&'"!,D'nfij/ "K0!?7'2B;&4'@4L'5,27'?&GJ'!7?4'@4L24'1+'@F'"-9"*$'34&?'"KNA'&"1.24'1+'6&',I4&M'?T&'?D'T[E'A dk "%K4,7'%1U'1+, @d'A'?N!'"!'!4&F-4&'34&?'"KNA'"%<."?9?'%4'ehsk iKdk 1FKDW pPos/ 1F&'"!'"@OD'"!,D'!4&F-4&'2D'",&G'(N!'"1N,D'24'#B%4=4, @F'"!,D'0"@1D'"K0!?7'2B;&4'A:4(;'@4'"&14'1+'@F'"-9"*$'34&?'"KA'"%K4,7'%1U'1+'@4L',I4&M'?T&'?D'0"@14'fBtk;h %1U'1+, "-9"*$'34&?'"KA'fJeZmk iK g?dk 1B.24'1+'@4L'34&?7'(%!#)*+!,'E!*, 1922 0I7%'(,'?&\4L'fJeZmk iK g?dk 1FMk'#."%;'@4L24'1+, ?4L'5,'jkbks B{z ^NP'e/ "@NOD'fe !4&F-4&'(N!'0"@1D'"K0!?7'24'1+'@F'"-9"*$'34&?'"KNA'&"1.24'1+'6&',I4&M'?T&'?D'"%K4,7' %1U' 1+' 0?D' eko'pko 34&?' "KA' "%<."?9?' 1+, (1' E!*' !DK:'!4&F-4&'2D'5,'"1N,D'5?D':4RQ'1FKDR4, 0?D'0"@14'"1N,4'(,'E!*'2D',4&D'52D$4L':/'(N!'0:NR'!4&F-4&'#."%;'@4KDR4W pPos/ 1F&'"!'(1'E!*'5,'!4&F-4&'?D':4RQ'%1U'1FKDR4'"@,'2D',4&D'#B%4=D'"!,D'34&?7'&4@'"KA'fJeZm/ @4L'6+24'1B.2D'1%0?D'"@NOD'!4&F-4&'2D'(N!'"1N,D'24'#B%4=4'"!,D'34&?7'&4@'"KA'fJeZmk @4L'6+24'1B.24'1+, 5,'"1N,D'%Q., (,'694KI4%'2D'52D$4L':/, (N!'0:NR'!4&F-4&'#."%;'@4KDR4'"@,'2D',4&D'#B%4=D'5,'34&?7'&4@'"KA'fJeZm/ @4L'6+24'1B.2D'1%, 0?D'!4&F-4&'24'2Q@4'"1N,4'(,'E!*'2D',4&D'52D$4L':/'(N!'0:NR'!4&F-4&'#."%;'@4KDR48E!*'2hI4&421, "@,%Q.',4PD',41#MD'1FJh'-"1,'"KNA'1K4:4'%1U'"2N?4'"R;, (,'?&\4L'1+W) 21H 34&?7' (%!#)*+!,' E!*, 1922 2hnK I4&4tK 4^J/, 4^ph, 10, 13, 24^ph, 29, 36 ?J'44^;h (ftu PkwbX, 45 ?J'48 (ftu PkwbX, 49^Jh, 49^n?c, 50, 54, 61 ?J'63 (ftu PkwbX, 65 ?J'67^J/ (ftu PkwbX'2D'694KI4%'T[%\4L',FI4L'%4:, @D'!F/'1%, @F'"%&I4"&?' 1F',!2D'1%, (,'E!*'2D'694KI4%4L'K@J':4RQ'1FMRD'0?D'(%!#)*+!,'27'O4L'E!,+,'69F"G*,'*+!,'dk 1K4:4'd/ oj/ jB, 0?D'1&'0"I!4&7'@F'(%!#)*+!,'%4:',-."I?'5!?'694KI4%4L'2D'0I7%'0"I!4&'K&?24'1+, (,'E!*'2D'0I7%'E!,+,'69F"G*,'*+!,'2D',-.I'"KNA'517'0"I!4&'K&?',!24'1+'"@KZ'5,'%D'I4&43 2h'56)'I4&4'H3) 0I7%'5,'%Q.',d6D'RV'!D,4L'"KNA'(%!#)*+!,'%4:',-."I?'5!?'E!*'0I7%'nfXekoK dh tos'A !&24'1+WpPos/ "!'5!?'694KI4%4L'"KA'eodksktK 2D';pzX ftu jtkbk T[; "K0!?7';pzX 2D'1K4:D'K@J',#"S;'@4KDR4 fi;d/ eko'pko %Q.'(jE!*'bkr{ j[zdk j?. 34&?7'(%!#)*+!,'E!*'2hI4&442 24',-.I?'34R'(,'?&\4L'1+W') 42H (1) ,4&7';#2%, #B%4=4'@4L':43'@F'",NID'@4L'0",NID'?T&?D, "-9"*$'34&?'"KNA'"!,D'!4&F-4&7',.-.I'&41U, @4L'"-9"*$'34&?'"KNA'"!,D',.6?7'&41U, @4L'"-9"*$'34&?'"KNA'"!,D',.6?7'@4L';#2%'2D',&F?'&41U, @4L'"K;@?D'"2N?D'RV'I%'&41U'@F'%!27'@4L',#4%'d/ o{g "KNA'"-9"*$'34&?'"KNA'":;L2D'RV'1%, 5%\4L'%Q.'"-9"*$'34&?'"KNA'fJeZmh @4L'6+24'1FM'K4:7';#2%'K@J'#."%;'@4KDR4, 0?D'"@OD';#2%, #B%4=4'@4L':43'24'1N!24&'"K0!?7'"-9"*$'34&?'"KNA'"%K4,7'%1U'1+, sK'(%!#)*+!,':/'T[j nkg y[Zd @4L'k'V@.*'">.#DK4&'1FKDR4aaaaHHHH 5,2 (2) "@NOD'!F/'"K0!?7'@F'"-9"*$'34&?'"KA'"%K4,7'%1U'1+'@4L',I4&M'?T&'?D'"%K4,7'%1U'1+, 51'"-9"*$'34&?'"KA'"!,D'"%K4,7'"K0!?7'%4:'!4&F-4&'!&24'1+, 0?D'(%!#)*+!,'0G,&'%Q.'(1':NR24'1+'"!'0"@1D'"K0!?7;L'"KA!4&'2D'B/Vb/ ',.-.I'!4&%'!4&F-4&'27'69"!"&;'(,'?&\4L'"KK,"O?'1+'"!'"%K4,7'"K0!?7'2B;&4'"%K4,7'%4'1FM'K4:D'@4L',I4&M'?T&?D'"%K4,7'%4'1FM'K4:D'"K0!?7'%4:'!7?D'RV'!4&F-4&'?J'"%K4,7'%Q.'!F/'#B%4=4' %1U' 1B.24' @4L' 5#72' 0%B,4&' ,I4&M' #B%4=4' ?J' eN*' 1B.24' 1+, 5,'!4&F-4&'?J'6946?'#B%4=4'@4L'@F'#B%4=4',#"S;'@4KDR4, 5,'"%K4,7'"K0!?7'2D'%4#'"KNA'(%!#)*+!,':/'A4&@:'r'1FKDR4, "@,'%Q.'(,'E!*'2D',4&D'52D$4L':/'nfij/ fJBew N?e; bJh eodksk #."%;'@4KDR48 (3) "!,D'!4&F-4&'2D'#4#:D'"KA'"@,2D',4&D'!4&@'"-9"*$'34&?'"KA'%1U'!7?D'@4L2D, (,',+!$%'0I7%'"-9"*$'34&?'"KA'fJeZm/ @4L'6+24'1FM'bJh ,#SD'@4M'K4:D'!4&F-4&'2D'#B%4=D'0?D':43'!DK:'51'#B%4=D'0?D':43'1FMRD'@F'5,'"1N,D'2D'!4&@4L'%4:',.-."I?'1%'@F'"-9"*$'34&?'"KA'!7?D'RV'1%8c Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) कमिश्नर लेकिनब्रिटिशभारतमेंसामान्यरूपसेनिवासीनहींहैजबतककि आय-कर, भारतमेंव्यवसायनियंत्रितहैः बॉम्बे बशर्तेकिजहाँकिसीभागकालाभ अहमदभाईकेवलएकऐसेव्यक्तिद्वाराचलाएजानेवालेव्यवसायकेहैंजोउमरभाईएंडकंपनीनहींहै। ब्रिटिशभारतमेंनिवासीयासामान्यरूपसेनिवासीनहीं . जे.कनियासीब्रिटिशभारतमेंजमायाउत्पन्नहोतेहैंयाइसकेतहतमानेजातेहैं भारतीयआय-, 1922, , करअधिनियमताकिअर्जितकियाजासकेयाउत्पन्नकियाजासकेइसकेअलावाजहांव्यवसायकिसीऐसेव्यक्तिकाव्यवसायहैजोनिवासीहैलेकिनसामान्यरूपसेनिवासीनहींहै। , , ब्रिटिशभारतभारतमेंनियंत्रितहैयहअधिनियमकेवलव्यवसायकेऐसेहिस्सेपरलागूहोगाऔरइसअधिनियमकेसभीउद्देश्योंकेलिएऐसाहिस्साएक अलगव्यवसायः बशर्तेकियहअधिनियमलागूनहींहोगा ऐसाकोर्इव्यवसायजिसकासंपूर्णलाभकिसीभारतीयराज्यमेंअर्जितहोताहैयाउत्पन्नहोताहैऔरजहांकिसीव्यवसायके, किसीभागकालाभकिसीभारतीयराज्यमेंअर्जितहोताहैयाउत्पन्नहोताहैवहांइसप्रावधानकेप्रयोजनोंकेलिएऐसाभाग, , एकअलगव्यवसायमानाजाएगाजिसकापूरालाभकिसीभारतीयराज्यमेंअर्जितहोताहैयाउत्पन्नहोताहैऔरव्यवसाय21, कादूसराभागइसअधिनियमकेसभीउद्देश्योंकेलिएएकअलगव्यवसायमानाजाएगा।अधिनियमकीधाराजिसकाहमारे, ---सामनेदलीलोंकेदौरानउल्लेखनहींकियागयाथाइसप्रकारहैः"21. भारतीयआय-, 1922 कीधारा4-ए, 4-बी, 10,13,24-बी, 29,36 से44-सी(समावेशी), 45 सेकरअधिनियम48 (समावेशी), 49-ई, 49-एफ, 50,54,61 से63 (समावेशी), 65 से67- ए(समावेशी) केप्रावधान,, , ऐसेसंशोधनोंकेसाथलागूकरेंयदिकोईहोंजोनिर्धारितकिएजाएंजैसेकिउक्तप्रावधानइसअधिनियमकेप्रावधानथेऔरआय-, औरआय-करकेबजायअतिरिक्तलाभकरकोसंदर्भितकरतेहैंकरकेसंबंधमेंउक्तप्रावधानोंकेतहतशक्तियोंकाप्रयोगकरनेवालाप्रत्येकअधिकारीधारा3 कीउप-धारा(3) केतहतउसेसौंपेगएमामलोंकेसंबंधमेंअतिरिक्तलाभकरकेसंबंधमेंइसअधिनियमकेतहत-समानशक्तियोंकाप्रयोगकरेंजैसाकिवहउक्तअधिनियमकेतहतआयकरकेसंबंधमेंकरताहैः बशर्तेकिउक्तप्रावधानोंमेंदिएगएसंदर्भ निर्धारितीकाअर्थउसव्यक्तिकेप्रतिनिर्देशकेरूपमेंकियाजाएगाजिसकेव्यवसायपरयहअधिनियमलागूहोताहै। एस. सी. आर. सर्वोच्चन्यायालयकीरिपोर्ट 339 42 भारतीयसंविधानकीधाराकाप्रासंगिकभाग आय-करअधिनियमइनशब्दोंमेंहैः आय-,करआयुक्त 42. ( 1 ) , लाभयालाभउपार्जितसभीआय, , याउत्पन्नहोनाचाहेप्रत्यक्षयाअप्रत्यक्षरूपसे.बॉम्बेवी,ब्रिटिशभारतमेंकिसीभीव्यावसायिकसंबंधसे अहमदभाई ,याब्रिटिशभारतमेंकिसीसंपत्तिकेमाध्यमसेयाउससे. जे.उमरभाईएंडकंपनीकनियासीयाकिसीसंपत्तियाआयकेस्रोतकेमाध्यमसेयाउससे, ब्रिटिशभारतमेंयाकिसीभीधनकेमाध्यमसेयाऋणसेब्याजऔरब्रिटिशभारतमेंनकदयामेंलायागयाउपार्जितयाउद्भूतहोनेवालीआयमानीजाएगी।, ब्रिटिशभारतकेभीतरऔरजहाँव्यक्तिकाअधिकारहैआय, लाभयालाभअंग्रेजोंमेंनिवासीनहींहै।भारत, आय-करकेलिएप्रभार्यहोगायातोउसकेउसकेएजेंटटकेनामपरयाउसकेनामपर।( 2 ) जहाँकोईव्यक्तिनिवासीनहींहैयासामान्यरूपसेनहींहैटट ी , ब्रिटिशभारतमेंनिवासीएककेसाथव्यवसायकरताहै, ब्रिटिशभारतमेंरहनेवालाव्यक्तिऔरआयकरअधिकारीकोयहप्रतीतहोताहैकिऐसेव्यक्तियोंकेबीचघनिष्ठसंबंधहोनेकेकारणव्यवसायकामार्गऐसाहै व्यवस्थाकीकिनिवासीव्यक्तिद्वाराकियागयाव्यवसायवहव्यक्तिजोनिवासीनहींहैयासामान्यरूपसेनिवासीनहींहैनिवासीकोयातोकोईलाभनहींयासामान्यलाभसेकमजोउत्पन्नहोनेकीउम्मीदकीजासकतीहै, उसव्यवसायमेंउससेप्राप्तलाभयाजो उचितरूपसेव्युत्पन्नमानाजासकताहै वहाँसे, निवासीव्यक्तिकेनामपरआय-करप्रभार्यहोगा, जिसेइसअधिनियमकेसभीउद्देश्योंकेलिए, ऐसेआय-करकेसंबंधमेंनिर्धारितीमानाजाएगा। ( 3 ) एकऐसेव्यवसायकेमामलेमेंजिसकेसभी ,ब्रिटिशभारतमेंऑपरेशननहींकिएजातेहैं इसकेतहतमानेगएव्यवसायकेलाभऔरलाभ ब्रिटिशभारतमेंउपार्जितयाउत्पन्नहोनेवालीधाराकेवलऐसेलाभऔरलाभहोंगेजोउचितरूपसेदेयहों। अंग्रेजोंमेंकिएगएसंचालनकेउसहिस्सेमें भारत"। अपीलार्थीकीओरसेयहकोनथा सेछूटटपानेकेलिए अतिरिक्तलाभकरअधिनियमनिर्धारितीकोदिखानाहोताहै किउसकामामलाधारा5 परंतुक3 द्वाराकवरकियागयाहै। अपीलार्थीकीओरसेयहतर्कदियागयाकि : 340 [1950]सर्वोच्चन्यायालयकीरिपोर्ट 1950 वर्तमानमामलेमेंनिर्धारितीकेव्यवसायमेंतेलकानिर्माणऔरबिक्रीशामिलथीऔरजबतककिउनआयुक्तकार्योंमें, जोआय-सेप्रत्येकरायचूरमेंनहींहुआकरकेव्यवसायकाएकहिस्साहै। Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) (3) "!,D'!4&F-4&'2D'#4#:D'"KA'"@,2D',4&D'!4&@'"-9"*$'34&?'"KA'%1U'!7?D'@4L2D, (,',+!$%'0I7%'"-9"*$'34&?'"KA'fJeZm/ @4L'6+24'1FM'bJh ,#SD'@4M'K4:D'!4&F-4&'2D'#B%4=D'0?D':43'!DK:'51'#B%4=D'0?D':43'1FMRD'@F'5,'"1N,D'2D'!4&@4L'%4:',.-."I?'1%'@F'"-9"*$'34&?'"KA'!7?D'RV'1%8c 067:!&?4'KN:J'(1'?&!'"2N?4'"R;'j? "!'E!,+,'69F"G*,'*+!,'E!*'?J'^F*'6946?'!&%':/'eodksk %Q.'"2C45M4'6KDR4'"!'5,24'#4#:4'I4&45 2D'T[gpzX 3 EZb/ nkT[Adk 1+8'067:!&?4'2D'KN:J'?&!'"2N?4'"R;'j? 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[[1950] 1 S.C.R. 335] (1950) (2) Where a person not resident or not ordinarily resident in British India, carries on business with a person resident in British India, and it appears to the Income-tax Officer that owing to the close connection between such persons the course of business is so arranged that the business done by the resident person with the person not resident or not ordinarily resident produces to ,fhe resident either no profits or less than the ordinary profits which might be expected to arise in that business, the profits derived therefrom or which may reasonably be deemed to have been derived therefrom, shall be chargeable to income-tax in the name of the resident _.Jerson who shall be deemed to be, ,for all the purposes of this Act, the assessee in respect of such income-tax. (3) In the case of a business of which _all the operations are not carried out in British India, the profits and gains of the business deemed under this section to accrue or arise in British India shall.be only such profits and gains as are reasonably attributable to that part of the operations carried out in British India." On behalf of the appellant · it - was con-tended that in order to _ get exemption from the Exce::s Profits Tax -Act the assessee has to show that his case is covered by section 5 proviso 3. It \vas argued on behalf of the appellant that in the 1950 Co111111issio11cr of /11co111c-tax, Bo111l1ay v. Al1111cdblitri Untarb/Jai [ .. Ca. ff ania C. J. 1950 Co11iu1issioner .of lnco111c-f11x, Bo111!1ay v. Ah1111·dl1hai {/11tafbl1ai & Co. ]{ a1tia C. J. 340 SUPREME COURT REPORTS [1950J present case the business of the assessee consisted of manufacturing and selling oil and unless each of those operations took place at Raichur, "a part of the busi-ness" of the assessee was not at Raichur in the Hydera-bad State and therefore he was not entitled to the ex-emption claimed by him. It was secondly contended that even assuming that this was not correct the pro-fits of that part of the business, which was carried on at Raichur, did not accrue or arise in the Hyderabad State because the profits arose on the sale of the oil in Bombay and therefore the assessee's contention was in-correct. Proviso 3 to section 5 of the Excess Profits Tax Act requires the assessee to fulfil three conditions to secure the exemption. They are (I) there should be a part of a business ; (2) that must be in an Indian State ; and (3) profits in respect of which exemption is claimed must accrue or arise .from that part of the business. The appellant's contention is that the part of the business must be a complete unit or as described on his behalf a complete cross-section of the business. It is argued that inasmuch as the sale of the oil in question took place in Bombay the cross-section com-posed of manufacture and sale did not take place at Raichur in the Hyderabad State and therefore the as· sessee's contention must fail. In my opinion this conten~ tion is unsound. The definition of business in the Ex-cess Profits Tax Act clearly envisages manufacture as a business by itself. It is not necessary that a manufac-turer must be a trader in the commodity he manufac- · tures. Similarly because he is a manufacturer and a trader it does not follow that the two activities neces-sarily become one indissoluble business of which the profits c:rnnot be separately ascertained. Because a man is a mannfacturer, a trader and even an exporter it is not correct to say that unless all the three activities take place in an Indian State he is not entitled to the benefit of the proviso because a part of his busi- · ness is not in the Indian State. The argument of the appellant is that there should not be only a separate composite unit of the assessee's business in an Indian State but that each operation making up the assessee's business must take place in an Indian State. I find no S.C.R. SUPREME COURT REPORTS 341 Case: COMMISSIONER OF INCOME-TAX, BOMBAY versus AHMEDBHAI UMARBHAI & CO., BOMBAY. [[1950] 1 S.C.R. 335] (1950) ब्रिटिशभारतमेंउपार्जितयाउत्पन्नहोनेवालीधाराकेवलऐसेलाभऔरलाभहोंगेजोउचितरूपसेदेयहों। अंग्रेजोंमेंकिएगएसंचालनकेउसहिस्सेमें भारत"। अपीलार्थीकीओरसेयहकोनथा सेछूटटपानेकेलिए अतिरिक्तलाभकरअधिनियमनिर्धारितीकोदिखानाहोताहै किउसकामामलाधारा5 परंतुक3 द्वाराकवरकियागयाहै। अपीलार्थीकीओरसेयहतर्कदियागयाकि : 340 [1950]सर्वोच्चन्यायालयकीरिपोर्ट 1950 वर्तमानमामलेमेंनिर्धारितीकेव्यवसायमेंतेलकानिर्माणऔरबिक्रीशामिलथीऔरजबतककिउनआयुक्तकार्योंमें, जोआय-सेप्रत्येकरायचूरमेंनहींहुआकरकेव्यवसायकाएकहिस्साहै। निर्धारितीकाबॉम्बेनेसहैदरपंचमकेखराबराज्यकेरायचूरमेंनहींथाऔरइसलिएवहअपनेद्वारादावाकिएगएपूर्वअहमदहाई, पदकाहकदारनहींथा।दूसरायहतर्कदियागयाकियहमानतेहुएभीकियहसहीनहींथाव्यवसायकेउसहिस्सेकेकनियासी. जे. , , पक्षमेंजोरायचूरमेंचलायागयाथाहैदराबादराज्यमेंअर्जितयाउत्पन्ननहींहुआक्योंकिबॉम्बेमेंतेलकीबिक्रीसे5 3 लाभहुआऔरइसलिएनिर्धारितीकातर्कसहीथा।अतिरिक्तलाभकरअधिनियमकीधाराकेप्रावधानमेंनिर्धारितीकोतीन(1) ; (2) वहभारतीयशर्तोंकोपूराकरनेकीआवश्यकताहै।छूटटप्राप्तकरनेकेलिए।वेहैंव्यवसायकाएकहिस्साहोनाचाहिए; और(3) , राज्यमेंहोनाचाहिएलाभजिसकेसंबंधमेंछूटटकादावाकियाजाताहैव्यवसायकेउसहिस्सेसेप्राप्तहोनाचाहिएयाउत्पन्नहोनाचाहिए।अपीलार्थीकातर्कहैकिव्यवसायकाहिस्साएकपूर्णइकाईहोनाचाहिएयाजैसाकिउसकीओरसे-, व्यवसायकाएकपूर्णक्रॉससेक्शनबतायागयाहै।यहतर्कदियाजाताहैकिचूंकिविचाराधीनतेलकीबिक्रीबॉम्बेमेंहुईथीइसलिएउत्पादनऔरबिक्रीकाप्रस्तावहैदराबादराज्यकेरायचूरमेंनहींहुआथाऔरइसलिएसेसीकेरूपमेंउनकातर्कविफलहोनाचाहिए।मेरीरायमेंयहतर्कअनुचितहै।उपकरलाभकरअधिनियममेंव्यवसायकीपरिभाषामेंस्पष्टरूपसेविनिर्माणकोएकव्यवसायकेरूपमेंपरिकल्पितकियागयाहै।यहआवश्यकनहींहैकिएकविनिर्माताकोउसवस्तुकाव्यापारीहोना, चाहिएजिसेवहविनिर्माताहै।इसीतरहक्योंकिवहएकनिर्माताऔरएकव्यापारीहैइसकामतलबयहनहींहैकिदोनों-गतिविधियोंकोधीरेधीरेएकअघुलनशीलव्यवसायबननेकीआवश्यकताहै। , लाभकाअलगसेनिर्धारणनहींकियाजासकताहै।चूँकिएकव्यक्तिएकनिर्माताएकव्यापारीऔरयहाँतककिएकनिर्यातकभीहै, इसलिएयहकहनासहीनहींहैकिजबतकतीनोंगतिविधियाँकिसीभारतीयराज्यमेंनहींहोतीहैं, तबतकवहपरंतुककेलाभकाहकदारनहींहैक्योंकिवहअपनेव्यवसायकाएकहिस्साहै। नेसभारतीयराज्यमेंनहींहै।अपीलार्थीकातर्कहैकिकिसीभारतीयराज्यमेंनिर्धारितीकेव्यवसायकीकेवलएकअलगसमग्र, इकाईनहींहोनीचाहिएबल्किनिर्धारितीकेव्यवसायकोबनानेवालाप्रत्येकसंचालनभारतीयराज्यमेंहोनाचाहिए। मुझेकोईएस. सी. आर. सर्वोच्चन्यायालयकीरिपोर्टनहींमिलतीहै। 341 इसतरहकेनिर्माणकेलिएऔचित्य धारा3 सेधारा5 तक।परंतुककीइसतरहकीव्याख्याकासमर्थनकरनेकेलिएकिसीभीप्राधिकरणकाहवालानहींदियागयाहै।वर्तमानमामलेमेंयहतर्कनहींदियागयाहैकिएकनिर्माताकेरूपमेंनिर्धारितीकीगतिविधियाँइतनीफैलीहुईहैंकिवे, किसीभारतीयराज्यमेंव्यवसायकीएकइकाईकेरूपमेंपतालगानेमेंअसमर्थहैं।उदाहरणकेलिएकठिनाइयाँहोसकतीहैं आय-, करआयुक्तबॉम्बेअलीमेडभाई उमरभाईऔरसी. ए. कनियासी. जे. , , यदिकोईनिर्माताएकस्थानपरमूंगफलीखरीदताहैदूसरेस्थानपरएकक्रशिंगमिलहैतीसरेस्थानपरएकरिफाइनरीहैऔरचौथेस्थानपरपैकिंगआदिहै।यहाँयहविवादितनहींहैकिएकनिर्माताकेरूपमेंनिर्धारितीकीसभीगतिविधियाँरायचूरमेंहैंऔरयदिऐसाहै, तोअतिरिक्तलाभकरअधिनियममें'व्यावसायिकव्यवसाय' कीपरिभाषाकेतहतगतिविधिय