HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Malegaon Electricity Co. (P) Ltd. v. Commissioner of Income-tax, Bombay
Civil Appeal No. 1345 of 1967
[1971] 1 SCR 761 ·
Indian Income-tax Act, 1922: sections 10(2)(vii), 34(1)(a) and 66(1)
Sources & disclosures includedDownload original judgment / order
3-judge bench; unanimous judgment delivered by K. S. Hegde, J. · J. C. Shah, J. · K. S. Hegde, J. · A. N. Grover, J.
Assessment years: 1952-53
01 · Facts of the case
The company disclosed the sale of its undertaking and documents but omitted the assets' written-down value and any excess-sale-price profit from its return. A successor officer reassessed under section 34(1)(a) (SCR pp.761-765; PDF pp.1-5).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
Producing records from which the officer might discover a fact is not necessarily full disclosure. Written-down value was an essential primary fact. Yet whether any sale amount was section 10(2)(vii) profit had to be decided first; without that premise the reference questions could not be answered (SCR pp.765-768; PDF pp.5-8).
Source: Primary judgment: discussion
03 · Judicial decision
The Court declined to answer the reference questions, allowed the appeal and directed the Tribunal to decide deemed profit first and then the remaining issues; no costs were ordered (SCR p.768; PDF p.8).
Source: Primary judgment: decision
04 · Outcome / in whose favour
Procedural remand: incomplete disclosure was identified, but reassessment validity depended on a prior deemed-profit finding (SCR pp.765-768; PDF pp.5-8).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: disclose both transaction consideration and tax-basis figures, then establish the charging or deeming provision before litigating reassessment causation. Current disclosure duties and reopening thresholds differ (based on SCR pp.765-768; PDF pp.5-8).
Source: Primary judgment: review point
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
The decision applies repealed 1922 Act balancing-charge and reassessment provisions; current transfer and reassessment law was not checked.
Later treatment
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