NDLI: Executors of The Estate of J.k. Dubash Vs. Commissioner of Income Tax, Bombay City

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Succession will Indian Income tax Act succeed in such capacity
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Indian Income-tax Act, 1922 (11 of 1922)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Indian Income-tax Act (XI of 1922), s. 25 (4)—Succession— Death of person carrying on business—Executors carrying on business as going concern for, selling it under terms of wiill—Whether "succeed in such capacity ’’to testator—Date of succession-A person who carried on a business on which tax had been levied under the Income-tax Act of 1918 died on the 9th of April, 1949, leaving a will by which he authorised his executors to carry on big business as a going concern, as if they were absolute owners but without being responsible for loss, for a period not exceeding 12 months during which if any of his nephews wanted to purchase the business, they might sell it to him or them. The business was sold to one of the nephews on the 1st January, 1943. The question being whether for the purposes of s. 25 (4) of the Income-tax Act of 1922 as amended in 1939 the succession to the business took place on the 9th April, 1942, when the testator died or on the 1st January, 1943, when the business was sold :Held, affirming the decision of the Bombay High Court, that inasmuch as the business got vested in the executors on the death of the testator and the executor carried on the business within the meaning of ss. 3 and 10 of the Act, and as such became personally liable as assessees and there was thus a change in the assesse, a succession to the testator “in such capacity” took place on the date of the death of the assessee, even though the executors carried on the business as a going concern under the terms of the will and the business was also being carried on not for the benefit of the executors but for the benefit of the estate of the testator. Per PATANJALI SASTRI J.—The expression “succeeded by another person” in s. 26 (2) and s. 25 (4) of the Act includes not only eases of succession inter vivos but also cases of succession on death.While it is true that a transfer of ownership is ordinarily involved in cases of succession falling within s. 26 (2) and s. 25 (4), it is not an essential element of succession within the meaning of those provisions. The words “in such capacity” in s. 26 (2) and s, 25 (4) mean nothing more than the capacity of a person who carries on the business as the predecessor was carrying it on, that is, with a liability to be taxed on its profits and gains.
Judge	Honble Mr. Justice Harilal Jekisundas Kania Honble Mr. Justice Patanjali Sastri
Neutral Citation	1950 INSC 42
Petitioner	Executors Of The Estate Of J.K. Dubash
Respondent	Commissioner Of Income Tax, Bombay City
SCR	[1950] 1 S.C.R. 969
Judgement Date	1950-12-21
Case Number	105

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