{"id":45447,"date":"1977-02-18T00:00:00","date_gmt":"1977-02-17T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-vs-kurji-jinabhai-kotecha-on-18-february-1977"},"modified":"2018-06-18T18:33:50","modified_gmt":"2018-06-18T13:03:50","slug":"commissioner-of-income-vs-kurji-jinabhai-kotecha-on-18-february-1977","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-vs-kurji-jinabhai-kotecha-on-18-february-1977","title":{"rendered":"Commissioner Of Income … vs Kurji Jinabhai Kotecha on 18 February, 1977"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Commissioner Of Income … vs Kurji Jinabhai Kotecha on 18 February, 1977<\/div>\n
Equivalent citations: 1977 AIR 1142, \t\t 1977 SCC (2) 719<\/div>\n
Author: P Goswami<\/div>\n
Bench: Goswami, P.K.<\/div>\n
           PETITIONER:\nCOMMISSIONER OF INCOME TAXGUJARAT III, AHMEDABAD & ANOTHER\n\n\tVs.\n\nRESPONDENT:\nKURJI JINABHAI KOTECHA\n\nDATE OF JUDGMENT18\/02\/1977\n\nBENCH:\nGOSWAMI, P.K.\nBENCH:\nGOSWAMI, P.K.\nSINGH, JASWANT\n\nCITATION:\n 1977 AIR 1142\t\t  1977 SCC  (2) 719\n\n\nACT:\n\t    Income  Tax Act 1922--Section 24( 1 ) (2)--Whether\t ex-\n\tpenses\t incurred  in  carrying on illegal  business  to  be\n\tdeducted---Whether loss arising out of illegal business\t can\n\tbe set off against profits from legal business--Whether loss\n\tof  illegal  business  can be  carried\tforward\t to   future\n\tyears--Interpretation  of  statutes--Whether  ought  to\t  be\n\tconsistent  with morality--Whether continuation\t of  illegal\n\tactivity to be recognised.\n\t     Forward  Contracts\t  (Regulation)\t Act   1952--Section\n\t15(4)--Illegal contracts--Effect of income tax law.\n\n\n\nHEADNOTE:\n\t    The assessee carries on business of running Oil Mill and\n\tdealing in groundnuts, groundnut seeds and oil,\t speculative\n\tbusiness  in groundnuts, groundnut oil and groundnut  seeds,\n\tand speculation business in cotton errands etc.\t The  I.T.O.\n\tdisallowed  loss  in forward contracts\tand  groundnut\toil,\n\tgroundnuts  and groundnut seeds on the ground that it  arose\n\tout of illegal contracts on account of the same being banned\n\tunder  section 15(4) of the Forward  Contracts\t(Regulation)\n\tAct,  1952.  The Appellate Assistant Commissioner on  appeal\n\tconfirmed the decision of the l.T.O. but bifurcated the loss\n\tinto two headings, namely, loss incurred in hedging transac-\n\ttions  m the banned items and loss incurred  in\t speculative\n\ttransactions.\tOn second appeal,  the\tTribunal  held\tthat\n\tnotwithstanding the illegality of the transactions the\tloss\n\tcould be  set off and carried forward in accordance with the\n\tprovisions of section 24(1) and 24(2) of the Income Tax Act,\n\t1922.\tThe Tribunal accordingly directed that the  loss  in\n\thedging\t transactions  of  forward business  in\t the  banned\n\tcontracts be set off against the other profits of the asses-\n\tsee for the relevant accounting year under section 24(1) and\n\tthat  balance of loss relating to the  speculative  transac-\n\ttions  in  the banned contracts be carried  forward  to\t the\n\tfollowing year under section 24(2) of the Act to be set\t off\n\tagainst profit of the following year from speculative  busi-\n\tness.\tOn reference to the High Court, the High  Court\t an-\n\tswered\tboth  the questions in favour of  the  assessee\t and\n\tupheld the judgment of the Tribunal.  The High Court  relied\n\ton  its earlier judgment in the case of C.I.T. v.  S.C.\t Ko-\n\tthari.\n\tAllowing the appeal by certificate\n\tHELD:\n\t    (1)\t The  loss  incurred ,in  the  hedging\ttransactions\n\tcannot be set off against other profits in the previous year\n\tin  view of the decision of this Court partly reversing\t the\n\tjudgment  of  the High Court in the case  of  S.C.  Kothari.\n\t[31C-D]\n\tCommissioner  of Income-tax v. S.C. Kothari,<\/a> 69 ITR  1,\t ap-\n\tplied.\n\t    (2) It is admitted that the contract for speculation  in\n\tthe  commodity in question is banned under the Forward\tCon-\n\ttracts\t(Regulation)  Act 1952. To allow such a loss  to  be\n\tcarried forward is to permit a benefit of adjustment of loss\n\tfrom  an illegal business to spill over and continue in\t the\n\tfollowing  year even in a lawful speculative business.\t The\n\tspeculative  business which is carried on in  the  following\n\tyear must be a business of lawful speculation pertaining  to\n\tthe lawful and enforceable contracts.  An assessee  carrying\n\ton  a  lawful  speculative business in\tthe  following\tyear\n\tcannot derive benefit by carrying forward and setting off  a\n\tloss  from  illegal  speculative business  of\tthe  earlier\n\tyear.\tLaw  will assume an illegal business to die  out  of\n\texistence with all its losses to the assessee in the year of\n\tloss itself.  The assessee can derive no benefit on  account\n\tof the unlawful business in the following year.\t The  matter\n\twill  be  different if a lawful speculative  business  after\n\tincurring loss is\n\t    27\n\tdiscontinued  and loss thereupon is carried forward for\t set\n\toff  against  any other lawful speculative business  in\t the\n\tfollowing year.\t It is inconceivable that law can permit  an\n\tillegal activity to be carried on from which a benefit could\n\tbe  obtained.  The concept of carry forward is not the\tsame\n\tthing  as  the setting off of loss in a\t particular  illegal\n\tbusiness  against profit of that illegal business in a\tpar-\n\tticular\t year.\tThe two concepts have to be kept  distinctly\n\tseparate  even\tin  a taxing statute.  It is  true  that  by\n\tearning\t income from illegal trading activity  the  business\n\tdoes  not get tainted so far as exigibility to tax  is\tcon-\n\tcerned.\t  While computing income from illegal activity in  a\n\tparticular year all losses incurred in earning that particu-\n\tlar  income are also taken into account for  computation  of\n\treal  profits  even in the illegal business.   There  is   a\n\tmarked\tdistinction between the computation of a  particular\n\tyear's\tprofit from illegal trading activity and carry\tfor-\n\tward  of a loss to set it off against income in\t the  subse-\n\tquent  years  even assuming that such  illegal\tactivity  is\n\tcontinued against the provisions of law.  No illegal activi-\n\tty can be perpetuated under any provisions of law nor  bene-\n\tfit out of it.\tLaw will miss its paramount object if it  is\n\tnot  consistent\t with  morality and  any  interpretation  by\n\tcourts cannot lead to a result where continuation of illegal\n\tactivity  or  benefit attached to it is\t given\trecognition.\n\t[31D-H, 32A-D]\n\n\n\nJUDGMENT:\n<\/pre>\n
\tCIVIL APPELLATE JURISDICTION: Civil Appeal No. 580 of 1972.
\n\t    (From  the\tJudgment  and Order dated  8-9-1970  of\t the
\n\tGujarat High Court in Income-tax Reference No. 9\/68).
\n\tB.B. Ahuja and R.N. Sachthey, for the Appellants.
\n\tK.L. Hathi and P.C. Kapoor, for the respondent.
\n\tThe Judgment of the Court was delivered by
\n\t    GOSWAMI,  J.  This\tappeal by certificate  is  from\t the
\n\tjudgment  of the Gujarat High Court in an Income-tax  Refer-
\n\tence under section 66(1) of the Indian Income-tax Act,\t1922
\n\t(briefly the Act).\n<\/p>\n
\t    The\t two  questions which were earlier referred  by\t the
\n\tTribunal  to the High Court at the instance of\tthe  Commis-
\n\tsioner of Income-tax, Gujarat III. are as follows :–\n<\/p>\n
\t\t\t “(2)  Whether,\t on  the facts\tand  in\t the
\n\t\t      circumstances  of the case, the  assessee\t was
\n\t\t      entitled\tto  set\t off hedging.  loss  of\t Rs.
\n\t\t      31745\/- against other profits of the  previous
\n\t\t      year ?\n<\/p><\/blockquote>\n
\t\t      (2)  Whether on the facts and in\tthe  circum-
\n\t\t      stances of the case, the assessee was entitled
\n\t\t      to  carry forward the speculation loss of\t Rs.
\n\t\t      41603\/- to the next year ?”<\/p><\/blockquote>\n
\t    The\t following facts appear from the statement  of\tcase
\n\tand the order of the Tribunal:\n<\/p>\n
\t    The\t assessment  year  in question is  1957-58  and\t the
\n\tcorresponding  previous year is the Samvat year\t 2012.\t The
\n\tassessee is carrying on business by running an oil mill, and
\n\talso  doing  business in sales and purchase  of\t groundnuts,
\n\tgroundnut seeds and oil: speculation business in groundnuts,
\n\tgroundnut oil and groundnut seeds; and speculation  business
\n\tin  cotton, errands, etc.  His total income for the year  in
\n\tquestion  was  determined by the Income-tax Officer  as\t Rs.
\n\t1,71,632\/-. This was after allowing set off of loss  brought
\n\tforward\t from the year 1955-56 amounting to Rs.\t 2,11,431\/-.
\n\tIn  arriving at the figure of the total income, the  Income-
\n\ttax Officer disallowed loss amounting to
\n\t28<\/span>
\n\tRs.  73,348\/-in forward contracts in groundnut oil,  ground-
\n\tnuts  and groundnut seeds.  He disallowed this loss  on\t the
\n\tground that it arose out of illegal contracts on account  of
\n\tthe  same  being banned Under section 15(4) of\tthe  Forward
\n\tContracts (Regulation) Act, 1952.\n<\/p>\n
\t    It will appear that the break-up of losses in the  busi-
\n\tness of illegal forward contracts is as follows :–
\n\t\t( 1 ) Groundnut oil Account\t\tRs. 49,664\/-\n<\/p>\n
\t\t(2) Groundnut Account\t\t\tRs. 22,522\/-\n<\/p>\n
\t\t(3) Singdana (Groundnut seeds Account)
\n\t\t\tat Veraval\t\t\tRs.  1,162\/-\n<\/p>\n
\tTotal\t\t\t\t\t\tRs. 73,348\/-\n<\/p>\n
\tThe above third item of loss is arrived at by the Income-tax
\n\tOfficer\t after adjusting the profit of the forward  business
\n\tin groundnut seeds at Rajkot.\n<\/p>\n
\t    On\tappeal by the assessee the Appellate Assistant\tCom-
\n\tmissioner affirmed the order of the Income-tax Officer.\t The
\n\tAppellate  Assistant Commissioner.  however, bifurcated\t the
\n\tloss into two categories as follows :-\n<\/p>\n
\t    (1 ) Loss incurred in hedging transactions
\n\t\tin the banned items\t\t\tRs.331,745\/-\n<\/p>\n
\t    (2) Loss incurred in speculative tran-\n<\/p>\n
\t\tsactions (other than hedging transac-\n<\/p>\n
\t\ttions) in the banned items.\t\tRs. 41,603:\/-\n<\/p>\n
\t\t\t\t\tTotal:\t\tRs. 73,348\/-\n<\/p>\n
\t    The\t Appellate  Assistant  Commissioner  held  that\t the
\n\tassessee was not entitled to the set off of the loss against
\n\tthe  assessee’s other business under section 24(1 )  of\t the
\n\tAct and also that such loss could not be carried forward  to
\n\tthe following year under section 24(2) of the Act
\n\t    On a second appeal by the assessee before the  Appellate
\n\tTribunal,  the Tribunal held that notwithstanding the  ille-
\n\tgality\tof  the\t transactions the loss could be set off\t and
\n\tcarried forward in accordance with the provisions of section
\n\t24(1)  and  24(2)  respectively of the\tAct.   The  Tribunal
\n\taccordingly directed that the loss  in\thedging transactions
\n\tof forward business in the banned contracts amounting to Rs.
\n\t31,745\/- be set off against the\t other profits of the asses-
\n\tsee for the relevant accounting year under section 24(1) and
\n\tthat the balance loss of Rs. 41,603\/- relating to the specu-
\n\tlative\ttransactions  in  the banned  contracts\t be  carried
\n\tforward to the following year under section 24(2) of the Act
\n\tto  be\tset off against profits of the following  year\tfrom
\n\tspeculative business.\n<\/p>\n
\t    As\tstated earlier, at the instance of the\tCommissioner
\n\tof Incometax, the two questions set out above Were  referred
\n\tto the High ,Court under section 66(1) of the Act.  The High
\n\tCourt relying upon its
\n\t    29<\/span>
\n\tearlier\t judgment  in the Commissioner\tof   Income-tax\t  v.
\n\tS.C. Kothari<\/a>(1) answered both the questions in the  affirma-
\n\ttive in favour of the assessee.\t That decision was, however,
\n\tpartly\treversed  by  this  Court  in  the  Commissioner  of
\n\tIncome-tax  Gujarat  v. S.C. Kothari<\/a>(2) (hereinafter  to  be
\n\treferred  to as Kothari decision).  This Court held  in\t the
\n\tKothari decision as follows:\n<\/p>\n
\t\t      ”\t . . the taint of illegality of the business
\n\t\t      cannot  detract  from the tosses\tbeing  taken
\n\t\t      into  account  for computation of\t the  amount
\n\t\t      which  can  be subjected to tax  as  ‘profits’
\n\t\t      under section 10( 1 ) of the Act of 1922.\t The
\n\t\t      tax  collector cannot be heard to say that  he
\n\t\t      will bring the gross receipts to tax.  He\t can
\n\t\t      only tax profits of a trade or business.\tThat
\n\t\t      cannot  be done without deducting\t the  losses
\n\t\t      and the legitimate expenses of the business”.
\n\t\t      This Court, however, held that the High  Court
\n\t\t      was  in error in considering that any set\t off
\n\t\t      could be allowed in that case under the  first
\n\t\t      proviso  to  section 24(1).   This  Court\t ob-
\n\t\t      served:\n<\/p><\/blockquote>\n
\t\t      “The contract contemplated by  Explanation   2
\n\t\t      to   the first proviso to section 24( 1  )  of
\n\t\t      the  Income-tax  Act, 1922, has to be  an\t en-
\n\t\t      forceable\t contract and not  an  unenforceable
\n\t\t      one  by  reason  of any  taint  of  illegality
\n\t\t      resulting\t in its invalidity.  Set-off  cannot
\n\t\t      be allowed under the first proviso to  section
\n\t\t      24(1),  read  with Explanation 2\tthereto,  of
\n\t\t      losses  in  contracts which  are\tillegal\t and
\n\t\t      unenforceable  on account of contravention  of
\n\t\t      Section 15(4) of the Forward Contracts  (Regu-
\n\t\t      lation) Act, 1952”.\n<\/p><\/blockquote>\n
\tThis  Court  held the contracts in that case in\t respect  of
\n\twhich  the  loss  was incurred by the  assessee\t as  illeged
\n\tcontracts.  It also held that the assessee was not  entitled
\n\tto a set off under the first proviso to. section 24( 1 )  of
\n\tthe Act of the loss against its profit in speculative trans-
\n\tactions.   It, however, held that if the business  in  which
\n\tthe  loss  was sustained in that case was the  same  as\t the
\n\tbusiness  in which the profit was derived then the loss\t had
\n\tto be taken into account while computing the profits of\t the
\n\tbusiness  under\t section 10(2) of the Act.  In the  view  it
\n\ttook  this Court remitted the matter to the High  Court\t to.
\n\tdecide: the point which was not clear on the findings wheth-
\n\ter the profits and losses were\tincurred in the\t same  busi-
\n\tness even though that business involved the entering into of
\n\tcontracts some of which were illegal.\n<\/p>\n
\t    In the present case there is no dispute that the  losses
\n\twere  incurred in connection with  forward contracts   which
\n\twere  banned  under section 15(4) of the  Forward  Contracts
\n\t(Regulation)  Act.  It\tis also clear  that  the  Income-tax
\n\tOfficer adjusted the profit against the loss with regard  to
\n\tthe illegal business in groundnut seeds which was carried on
\n\tin two places, Veraval and Rajkot.  This set off is  permis-
\n\tsible under section 10(2) of the Act because it is only by
\n\t(1) 69 I.T.R. 1.\n<\/p>\n
\t(2) 82 I.T.R. 794.\n<\/p>\n
\t30<\/span><\/p>\n
\tsetting\t off  of  the loss of  the  particular\tbusiness  in
\n\tgroundnut   seeds that true profit with regard to that\tpar-
\n\tticular business can be computed under section 10(2).  There
\n\tis,  therefore, no reason to remit this case  as  the.course
\n\tearnestly  suggested  by Mr. Hathi for\tthe respondent.\t  In
\n\tKothari\t decision  (supra) it was  observed  by\t this  Court
\n\twhile  remitting  the case that “enough\t attention  was\t not
\n\tdevoted to the business which the assessee was doing and  in
\n\twhich  the profit of Rs. 2,19,046\/- was made  and the\tloss
\n\tof  Rs.\t 3,40,443\/- was sustained”.   Such  an\tuncertainty,
\n\thowever, is not present\t in the instant case.  The submission
\n\tof Mr. Hathi, therefore,  cannot be\taccepted.
\n\t    The present case rests upon section 24 of the Act.\tThat
\n\tsection so far as material for our purpose reads as  follows
\n\t:–\n<\/p>\n
\t      “24(1)  Where any assessee sustains a loss of  profits
\n\tor  gains  in any year under any of the heads  mentioned  in
\n\tsection 6, he shall be\tentitled to have the  amount of\t the
\n\tloss set off against his income, profits or gains under\t any
\n\tother head in that year:\n<\/p>\n
\t      Provided\tthat in computing  the\tprofits\t and   gains
\n\tchargeable  under the head ‘Profits and gains  of  business,
\n\tprofession or vocation, any loss sustained  in\t speculative
\n\ttransactions which are in the nature of a business shall not
\n\tbe taken into account except to the extent of the amount  of
\n\tprofits and gains, if any, in any other business  consisting
\n\tof speculative transactions:\n<\/p>\n
\t\t\t (2) Where any assessee sustains a loss\t  of
\n\t\t      profits  or gains in any year, being a  previ-
\n\t\t      ous  year not earlier than the  previous\tyear
\n\t\t      for the assessment for the year ending on\t the
\n\t\t      31st  day\t of March, 1940, in   any  business,
\n\t\t      profession or vocation, and the loss cannot be
\n\t\t      wholly set off under sub-section (1), so. much
\n\t\t      of the loss as is not so set off or the  whole
\n\t\t      loss where the assessee had no  other head  of
\n\t\t      income   shall be carried forward to the\tfol-
\n\t\t      lowing year, and\n<\/p><\/blockquote>\n
\t\t\t   (i)\twhere the loss was sustained by\t him
\n\t\t      in   a  business\tconsisting  of\t speculative
\n\t\t      transactions, it shall be set off only against
\n\t\t      the profits and gains, if any, of any business
\n\t\t      in speculative transactions carried on by\t him
\n\t\t      in that year;\n<\/p><\/blockquote>\n
\t\t\t   (ii)\t whether loss was sustained  by\t him
\n\t\t      in any other business, profession or vocation,
\n\t\t      it   shall be set off against the profits\t and
\n\t\t      gains, if any, or any business, profession  or
\n\t\t      vocation\tcarried\t on  by him  in\t that  year,
\n\t\t      provided\tthat  the  business,  profession  of
\n\t\t      vocation\tin which the. loss   was  originally
\n\t\t      sustained continued to be ‘carried On= by\t him
\n\t\t      in that year; and
\n\t\t\t       31<\/span>\n<\/p><\/blockquote>\n
\t\t      (iii)  if\t the loss in either case  cannot  be
\n\t\t      wholly  so set off, the amount of loss not  so
\n\t\t      set  off shall be carried forward to the\tfol-
\n\t\t      lowing year and so on but no loss shall be  so
\n\t\t      carried forward for more than eight years”.\n<\/p><\/blockquote>\n
\t\t      X\t\t     X\t\t    X\t\t   X\n\t\t      X\n<\/pre>\n
\t    In\tthe instant case there is no dispute about the\tfol-\n<\/p><\/blockquote>\n
\tlowing findings of facts:\n<\/p>\n
\t    The assessee sustained losses in the relevant accounting
\n\tyear amounting to Rs. 73,348\/-.\t This figure was arrived  at
\n\ton a legitimate computation under section 10(2) of the\tAct.
\n\tNo   further  question survives for a recomputation  of\t the
\n\tincome\tunder  Section 10(2) of the Act in this\t case.\t The
\n\tonly  question\tremains\t is as to whether the  loss  of\t Rs.
\n\t31,745\/- can be set off against other profits in the  previ-
\n\tous year.  This is the\tfirst question\tin  the\t  reference.
\n\tThis question has to be answered in the. negative in view of
\n\tKothari decision (supra).  The hedging loss being in respect
\n\tof  a  banned contract under section 15(4)  of\tthe  Forward
\n\tContracts (Regulation) Act, 1952, cannot be set off  against
\n\tthe profits of other business of the previous year.
\n\tThe  second question is with regard to the assessee’s  claim
\n\tfor entitlement to carry forward the speculation loss of Rs.
\n\t41,603\/-  to  the next year.  It is also admitted  that\t the
\n\tcontract  for  speculation in the commodity in\tquestion  is
\n\tbanned\tunder the Forward Contracts (Regulation) Act,  1952.
\n\tIt  also appears that the said loss could not be set off  in
\n\tthe  previous  year against profit in the same\tbusiness  in
\n\tthat  year.  The assessee contends that this loss should  be
\n\tallowed\t to  be carried forward under section 24(2)  of\t the
\n\tAct.   To allow such a claim is to permit a benefit  of\t ad-
\n\tjustment of loss from an illegal business to spill over\t and
\n\tcontinue in the following year even in a lawful\t speculative
\n\tbusiness.  A speculative business which is carried on in the
\n\tfollowing  year\t must be a business  of\t lawful\t speculation
\n\tpertaining to lawful and enforceable contracts.\t The  asses-
\n\tsee carrying on a lawful speculative business in the follow-
\n\ting  year  cannot  derive benefit by  carrying\tforward\t and
\n\tsetting\t off a loss from an illegal speculative business  of
\n\tthe  earlier year.  Law will assume an illegal\tbusiness  to
\n\tdie out of existence with all its losses to the assessee  in
\n\tthe year of loss itself.  The assessee can derive no benefit
\n\ton  account of the unlawful business in the following  year.
\n\tThe  matter will be different if a lawful speculative  busi-
\n\tness after incurring loss is discontinued and loss therefrom
\n\tis  carried  forward for set off against  any  other  lawful
\n\tspeculative  business  in the following year.  This  is\t the
\n\ttrue   legal effect of section 24(2)(i) of the Act  in\tthis
\n\tcase.\n<\/p>\n
\t    It\tiS  inconceivable  that law can\t permit\t an  illegal
\n\tactivity  to  be carried on from which a  benefit  could  be
\n\tobtained.   The\t concept of carry forward is  not  the\tsame
\n\tthing  as the setting off of loss in  a\t particular  illegal
\n\tbusiness  against  profit  of that illegal  business  in   a
\n\tparticular year.  The two concepts have to be kept distinct-
\n\tly separate
\n\t32<\/span>
\n\teven  in a taxing statute.  There is no express warrant\t for
\n\tthe submission either under section 20(2) or under any other
\n\tprovision of the Act, far less on general principles.
\n\t    It\tis true that by earning income from illegal  trading
\n\tactivity the income does not get tainted so far as exigibil-
\n\tity to tax is concerned. While computing income from illegal
\n\tactivity in a particular year all losses incurred in earning
\n\tthat  particular  income  are also taken  into\taccount\t for
\n\tcomputation  of real profits even in the  illegal  business.
\n\tThat does not mean that fines imposed on the illegal activi-
\n\tties  detected, prosecuted and punished or  otherwise  pena-
\n\tlised, will be taken into account for ascertainment of\treal
\n\tprofits.  There is, therefore, a marked distinction  between
\n\tcomputation  of\t a  particular year s  profit  from  illegal
\n\ttrading\t activity and carry forward of a loss to set it\t off
\n\tagainst\t income in subsequent years even assuming that\tsuch
\n\tillegal activity is continued against the provisions of law.
\n\tNo illegal activity can be perpetuated under any  provisions
\n\tof  law nor benefit out of it. Law will miss  its  paramount
\n\tobject if it is not consistent with morality and any  inter-
\n\tpretation by courts cannot read to a result where  continua-
\n\ttion of illegal activity or benefit attached to it is  given
\n\trecognition.\n<\/p>\n
\t    The second question, therefore, must be answered in\t the
\n\tnegative and against the assessee.\n<\/p>\n
\t    In\tthe  result the judgment of the High  Court  is\t set
\n\taside  and the two questions set out above are\tanswered  in
\n\tthe negative and in favour of the Department.  The appeal is
\n\tallowed with costs.\n<\/p>\n
\tP.H.P.\t\t\t\t\t\t      Appeal\n\tallowed.\n\t33<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Commissioner Of Income … vs Kurji Jinabhai Kotecha on 18 February, 1977 Equivalent citations: 1977 AIR 1142, 1977 SCC (2) 719 Author: P Goswami Bench: Goswami, P.K. PETITIONER: COMMISSIONER OF INCOME TAXGUJARAT III, AHMEDABAD & ANOTHER Vs. RESPONDENT: KURJI JINABHAI KOTECHA DATE OF JUDGMENT18\/02\/1977 BENCH: GOSWAMI, P.K. BENCH: GOSWAMI, P.K. SINGH, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-45447","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nCommissioner Of Income ... vs Kurji Jinabhai Kotecha on 18 February, 1977 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-vs-kurji-jinabhai-kotecha-on-18-february-1977\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Commissioner Of Income ... vs Kurji Jinabhai Kotecha on 18 February, 1977 - 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