HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Indian Molasses Co. (Private) Ltd. v. Commissioner of Income-tax, West Bengal
Civil Appeal No. 395 of 1957
[1959] Supp. (2) SCR 964 ·
Indian Income-tax Act, 1922, section 10(2)(xv)
Sources & disclosures includedDownload original judgment / order
3-judge bench · B. P. Sinha · J. L. Kapur · M. Hidayatullah
Assessment years: 1949–50, 1950–51, 1951–52, 1952–53
01 · Facts of the case
Company funded trustees with Rs 1,09,643 and annual premiums for deferred annuities for managing director Harvey and wife. Policy allowed surrender and repayment on specified contingencies before retirement date, potentially restoring funds to company through resulting trust.
Source: Primary report: SCR 966–969
02 · Discussion by the Hon’ble Court
Reference was narrowly whether expenditure existed; capital/revenue and business-purpose ingredients were not finally before Court. Under these arrangements company retained contingent dominion, unlike irrevocable discharge of an existing liability. Actual accrued liability must be distinguished from a reserve for a liability that may never arise.
03 · Judicial decision
Payments were not irretrievably spent in accounting years but set apart for contingent liability; no deductible expenditure under the referred limb of section 10(2)(xv).
Source: Primary report: SCR 982–986
04 · Outcome / in whose favour
Assessee appeal dismissed with costs; High Court negative answer sustained. Court corrected its second supposed policy contingency but upheld result on actual policy terms.
Source: Primary report: SCR 973, 986
05 · AKHB REVIEW POINT
Read trust and surrender/refund rights closely; do not describe this as deciding every pension contribution capital or non-business. Later Indian Molasses litigation is a separate decision.
Source & verification
Download original judgment / order · Open cited source rendition
Complete 23-page Supreme Court Reports scan. Any adjoining report fragments remain in the unchanged original and are excluded from this analysis.
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.