HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Kerala v. K. B. Kalikutty & Another
Civil Appeal No. 714 of 1966
[1969] 1 SCR 531 ·
Indian Income-tax Act, 1922: section 10(2)(vii), second proviso · Taxation Laws (Extension to Merged States and Amendment) Act, 1949: section 11
Sources & disclosures includedDownload original judgment / order
3-judge bench; unanimous judgment delivered by A. N. Grover, J. · J. C. Shah, J. · V. Ramaswami, J. · A. N. Grover, J.
Assessment years: Not stated; previous year ended 16 August 1959
01 · Facts of the case
The assessee ran Kumar Motor Service and sold six buses during the previous year ending 16 August 1959 after using them for part of that year. The Income-tax Officer treated Rs.49,288—the excess of the buses’ Rs.86,000 sale value over written-down value—as profit under the second proviso to section 10(2)(vii). The Tribunal upheld the charge, but the Kerala High Court assumed the whole business was wound up and answered for the assessee (SCR pp.531-533; PDF pp.1-3).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
Before the 1949 amendment, authorities had required the machinery to be sold while business continued rather than as part of closing or winding up. The amendment inserted the words “whether during the continuance of the business or after the cessation thereof”. Giving those words effect removed that third condition. It was enough that business had been carried on during all or part of the previous year and the machinery had been used in it. Both findings existed here, so even a closing or realisation sale fell within the proviso (SCR pp.533-536; PDF pp.3-6).
Source: Primary judgment: discussion
03 · Judicial decision
The Court answered the reference affirmatively against the assessee, held Rs.49,288 chargeable, discharged the High Court’s answer and allowed Revenue’s appeal with costs. It left the separate death and non-impleadment consequence to the Tribunal under section 66(5) (SCR p.536; PDF p.6).
Source: Primary judgment: decision
04 · Outcome / in whose favour
In favour of Revenue on the historical balancing-charge question. The bus-sale profit was taxable even on the closing-sale assumption, while the legal-representative issue remained for the Tribunal (SCR pp.535-536; PDF pp.5-6).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: align each cited authority with the precise statutory version. Here a short inserted phrase reversed the relevance of the earlier closing-sale condition. Preserve the unresolved party-procedure point and do not translate this result into modern depreciation or capital-gains treatment without checking the current statute (based on SCR pp.533-536; PDF pp.3-6).
Source: Primary judgment: reviewPoint
Source & verification
Download original judgment / order · Open cited source rendition
Full 6-page SCR source asset read in page-preserving text and visually inspected. Adjacent-report boundaries, where present, were distinguished from the target judgment.
- Exact source bytes, SHA-256 and six-page count match catalogue asset 1969_1_531_536; every page was read and visually inspected.
- The source verifies Civil Appeal No. 714 of 1966, the stated bench, issue, reasoning and operative result.
- No exact source-hash, asset-ID, SCR-citation, docket or same-judgment match was found in the published corpus or reviewed release archive.
Statutory scope
The ruling construes the amended balancing-charge provision in the repealed Indian Income-tax Act, 1922. It does not state the current tax treatment of asset sales, depreciation recapture, capital gains or business cessation.
Later treatment
Source checked 2026-10-11. Later judicial treatment and current statutory applicability have not been comprehensively checked; no current-law or citator clearance is represented.
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