HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Pingle Industries Ltd., Secunderabad v. Commissioner of Income-tax, Hyderabad
Civil Appeal No. 190 of 1955
[1960] 3 SCR 681 ·
Hyderabad Income-tax Act: section 12(2)(xv) · Indian Income-tax Act, 1922: corresponding section 10(2)(xv)
Sources & disclosures includedDownload original judgment / order
3-judge bench · S. K. Das · J. L. Kapur · M. Hidayatullah
Assessment years: 1357F, 1358F
01 · Facts of the case
A flag-stone dealer obtained exclusive long-term quarrying rights, principally for twelve years, against a fixed consideration paid partly upfront and partly in instalments. It claimed deductions for payments as the cost of materials or working expenses.
02 · Discussion by the Hon’ble Court
Kapur and Hidayatullah JJ treated the acquisition as an enduring source from which stones had to be won; unextracted stones were not trading stock. Instalments did not turn the capital price into rent or royalty. S. K. Das J dissented, construing the transaction commercially as purchase of raw materials with permission to remove them.
Source: Primary report: Dissent SCR 685–695; majority SCR 698–713
03 · Judicial decision
By majority, the payments were capital expenditure and not deductible under section 12(2)(xv). The High Court’s answer stood.
Source: Primary report: SCR 711–713
04 · Outcome / in whose favour
The assessee appeal was dismissed with costs under the majority judgment. The dissent would have allowed the claim but was not the operative order.
Source: Primary report: SCR 695, 713
05 · AKHB REVIEW POINT
Examine the nature of the right acquired and reason for payment, not periodicity alone. Distinguish purchase of raw material from acquisition of its enduring source; the Court emphasised fact-specific analysis rather than a universal lease-duration test.
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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