HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, West Bengal v. Calcutta National Bank Ltd. (in liquidation)
Civil Appeal No. 4 of 1956
[1959] Supp. (2) SCR 660 ·
Excess Profits Tax Act, 1940, sections 2(5), 2(19), 4, Schedule I rule 4(4)
Sources & disclosures includedDownload original judgment / order
3-judge bench · B. P. Sinha · J. L. Kapur · M. Hidayatullah
Assessment years: Chargeable accounting period ending 31 March 1946
01 · Facts of the case
Bank occupied a small part of its six-storeyed headquarters and rented the remainder, earning Rs 86,000. Tribunal found building partly intended for rental investment within corporate objects; High Court excluded rents because holding property was not bank’s whole or main function.
Source: Primary report: SCR 662–664
02 · Discussion by the Hon’ble Court
Sinha held main inclusive business definition applied independently of first proviso: actual rental activity pursued authorized objects; income-tax heads did not delimit excess-profits scope. Hidayatullah separately concurred, treating building as investment and giving effect to Schedule’s partly-letting language. Kapur dissented: banking functions did not make rents business and computation rule could not enlarge statutory definition.
Source: Primary report: SCR 665–692
03 · Judicial decision
Majority held rental income included in business profits for excess-profits tax under section 2(5) with Schedule I rule 4(4).
Source: Primary report: SCR 679, 688–692
04 · Outcome / in whose favour
Revenue appeal allowed by majority; High Court decision set aside; costs here and below. Kapur would dismiss with costs.
Source: Primary report: SCR 687, 692
05 · AKHB REVIEW POINT
Preserve three opinions and historical excess-profits context; not a blanket ruling that all bank rental income falls under business head in ordinary income-tax law.
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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