HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Ellerman Lines Ltd. v. Commissioner of Income-tax, West Bengal, Calcutta
Civil Appeals Nos. 2459-2460 of 1968 and 1161-1162 of 1971
[1972] 2 SCR 168 ·
Indian Income-tax Act, 1922: sections 3, 4, 5(8), 10(2)(vib) and 66(1) · Income-tax Rules, 1922: rule 33
Sources & disclosures includedDownload original judgment / order
2-judge bench; unanimous judgment delivered by K. S. Hegde, J. · K. S. Hegde, J. · A. N. Grover, J.
Assessment years: 1960-61, 1961-62
01 · Facts of the case
The British shipping company used U.K. ratio certificates for Indian income. The dispute concerned whether U.K. investment allowance, capped at the Indian development-rebate rate, could enter the computation; the destination-earnings issue was no longer appealed (SCR pp.170-172; PDF pp.3-5).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
The parties had mistakenly assumed rule 33's second basis applied without its prerequisite. The residual basis permitted an equitable method constrained by binding Board directions. The 1942 notification and later instruction supported use of the U.K. certificates and allowance. The Court assumed, without deciding, that rule 33 governed (SCR pp.173-176; PDF pp.6-9).
Source: Primary judgment: discussion
03 · Judicial decision
The substantive appeals were allowed with one set of Supreme Court and High Court costs; the two defective-certificate appeals were dismissed as not maintainable without costs (SCR p.176; PDF p.9).
Source: Primary judgment: decision
04 · Outcome / in whose favour
Substantively in favour of the assessee, with the procedural qualification preserved (SCR p.176; PDF p.9).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: identify the exact computational route and verify its prerequisites. Under a residual method, contemporaneous binding directions may constrain discretion; preserve express judicial reservations and caps (based on SCR pp.174-176; PDF pp.7-9).
Source: Primary judgment: review point
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
This historical 1922 Act and rule 33 shipping computation does not certify treatment under current statutes, treaties or circulars.
Later treatment
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