HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Madhya Pradesh and Bhopal v. Vyas & Dotiwala
Civil Appeal No. 222 of 1956
[1959] Supp. 1 SCR 39 ·
Indian Income-tax Act, 1922: sections 4, 4(3)(i-a)
Sources & disclosures includedDownload original judgment / order
3-judge bench · T. L. Venkatarama Aiyar · P. B. Gajendragadkar · A. K. Sarkar
Assessment years: 1945-46, 1946-47
01 · Facts of the case
An association financed and distributed standard cloth under a Deputy Commissioner’s controlled scheme. Its books showed distribution profits; the agreement directed resulting profits to charity selected through the scheme.
02 · Discussion by the Hon’ble Court
Government control did not prevent the assessees from carrying on business. The price guarantee and charitable-use clause indicated that the profits belonged to them. An agreement to spend their profits on charity did not change accrual. The business was not carried on for any religious or charitable institution as the exemption required.
03 · Judicial decision
The profits accrued to the assessees and were assessable, without section 4(3)(i-a) exemption.
04 · Outcome / in whose favour
Revenue appeal allowed with costs here and below; both parts of the reference answered affirmatively.
Source: Primary report: SCR Supp. (1) 45
05 · AKHB REVIEW POINT
Distinguish ownership and accrual of business profits from a subsequent obligation or intention to apply them to charity. Test the actual statutory institutional conditions.
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
Source checked 2026-10-23. Subsequent treatment and present-law applicability have not been comprehensively checked.
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General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. AKHB REVIEW POINT is editorial analysis, not the Court’s holding.