RAGHUVANSHI MILLS LTD Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE question that arises in this reference is whether the two sums of Rs. 8,25,000 and Rs. 5,75,000 received by the assessee, the Raghuvanshi Mills, Ltd. , Bombay, on September 8, 1944, and on December 22, 1944, respectively, are subject to tax.

(2.) THE company came to receive these two sums in these circumstances. A fire broke out in the company's mills on January 18, 1944, with the result that the buildings, etc, were destroyed and there was a cessation of the manufacturing activities of the company. THE company had taken out a policy with the South India Fire and General Insurance Company, Limited, and with other insurance companies of the nature known as "consequential Loss Policies. " THEse policies indemnified the company against any loss of profits which might result as a consequence of any fire that may break out, and it is not disputed before us that these two sums were received by the assessee company as an indemnity for the loss suffered by them of their profits because of the cessation of the company's activities as a manufacturing company.

(3.) I would only like to add that the question framed by the Income-tax Appellate Tribunal is not in proper form and we would re-formulate the question so as to read: Whether in the circumstances of the case, the sum of Rs. 14,00,000 was the assessee company's income within the meaning of the Indian Income-tax Act and liable to pay income-tax under the Indian Income-tax Act ?