INDIA CARBON LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference under Section 256(1) of the INcome-tax Act, 1961, the following question of law has been referred :

(2.) THE facts, which appear from the statement of the case, are as follows:

(3.) THE assessee's contention before the Income-tax Officer was that the receipt being of casual and non-recurring nature arising in the special circumstances of the case, namely, the issue of shares being over-subscribed beyond even the wildest expectation of the company, it was exempt from tax under Section 10(3) of the Act. THE Income-tax Officer rejected the contention of the assessee observing that the interest income earned by the issue of shares was not casual receipt but was clearly income which was taxable. Thus holding, the Income-tax Officer allowed on estimate an expenditure of Rs. 7,000, having been incurred for the purpose of earning such income, and brought to tax a net sum of Rs. 2,41,180 (wrongly calculated) as income liable to be assessed under the head " Other sources ".