HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Sohan Pathak and Sons v. Commissioner of Income-tax, U.P.
Civil Appeals Nos. 47–50 of 1952
[1954] SCR 158 ·
Excess Profits Tax Act, 1940: sections 4, 5, 10-A; section 8(1) alternative not decided
Sources & disclosures includedDownload original judgment / order
5-judge bench · Patanjali Sastri C.J. · B. K. Mukherjea J. · Vivian Bose J. · Ghulam Hasan J. · Jagannadhadas J.
Assessment years: Chargeable accounting periods following the July 1943 partition
01 · Facts of the case
The family partitioned its brocade business on 16 July 1943, actually distributing assets and liabilities among fourteen coparceners. Two partnerships then carried on the trade. The excess profits tax officer added their profits to the former family business under section 10-A.
Source: Primary report: SCR 158–163
02 · Discussion by the Hon’ble Court
The supplementary statement established actual discontinuance and distribution, rather than a mere division into undivided shares. Although evidence supported a principal tax-avoidance purpose, section 10-A presupposed a business to which the charging provisions applied; it could not revive a discontinued business which earned no relevant profits. Sections 4 and 5 did not bring the discontinued family business within the charge for the relevant subsequent periods. Section 10-A therefore could not support the adjustment. The alternative section 8 contention was unnecessary.
03 · Judicial decision
The appeals were allowed with costs, with one advocate’s fee. The first reference answer was reversed; the High Court judgment otherwise stood.
Source: Primary report: SCR 167
04 · Outcome / in whose favour
Assessee. The appeals were allowed with costs, with one advocate’s fee. The first reference answer was reversed; the High Court judgment otherwise stood.
Source: Primary report: SCR 167
05 · AKHB REVIEW POINT
Establish actual discontinuance and asset distribution before invoking this historical ruling. The Court did not reject the avoidance-purpose finding or approve avoidance generally; it decided the reach of the particular charging and adjustment provisions.
Source: Primary report: SCR 163–167
Source & verification
Download original judgment / order · Open cited source rendition
Full ten-page asset read; Sardar Indra Singh opening on final reporter page is a separate case.
Statutory scope
Historical statutory text and assessment period only. Present statutory equivalence and later judicial treatment are not cleared.
Later treatment
Source checked 2026-10-19. Subsequent treatment and current-law applicability have not been comprehensively checked.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from an identified primary report. Independent human review is not represented.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court’s holding. No current-law clearance is claimed.