WHITTLE ANDERSON LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE sole question referred for our decision is : 'Whether, on the facts and in the circumstances of the case, the finding of the Tribunal that the machinery was 'used' so as to attract the operation of the second proviso to section 10(2) (vii) of the 1922 Act is right in law ?'

(2.) WE are concerned in this reference with the assessment year 1958 -59, corresponding to the previous account year August 1, 1956, to July 31, 1957. The question arises under the following circumstances : The assessee, Whittle Anderson Ltd., now in voluntary liquidation, were engaged in the business of running ginning and pressing factories at Viramgam in Gujarat and other places. The assessee owned two presses at the ginning and pressing trade is a seasonal trade. It is carried on only during the time that the cotton season is on. It is not in dispute that in the present case the cotton season was from March till the end of May, or, as has been stated in the statement of the case, till the beginning of June. There were other factories in Viramgam doing similar business, and they entered into a pooling agreement with the assessee. The two other presses belonged to the Viramgam Vepar Uttejak Ginning Co. The pooling agreement is dated 8th February, 1950, and the above four presses were directly involved in that agreement.

(3.) ON 28th July, 1956, G. D. Shah, a director of the company, wrote to the Income -tax Officer at Ahmedabad, that the company was giving notice under section 25(2) of the Income -tax Act that the business of Cotton Ginning and Pressing Factory hitherto carried on by Whittle Anderson Ltd. at Viramgam and elsewhere had been discontinued with effect from 15th July, 1956. The company also claimed relief under the provisions of the third and fourth sub -sections to section 25 because they alleged that they had been assessee to income -tax under the provisions of the Indian Income -tax Act of 1918. It appears that this claim of the assessee failed because it was held that provision of the law was not attracted in that case, but it may be stated here that in those proceedings on decision was given as to the continuance or discontinuance of the business as claimed by the assessee in their letter dated 28th July, 1956. This was the position at the end of the accounting year ending 31st July 1957, so far as a assessee is concerned.