says that if the Commission "has reason to believe that some person other that the preson whose case is being investigated has evaded payment of taxation on income". And in the above view of the matter, the declared position of law was clear and explicit well before the controversy in hand was determined by the High Court at Madras. If what is got rid of by a lump sum payment is an annual business expense chargeable against revenue, the lump sum payment should equally be regarded as a business expense, but if the lump sum payment brings in a capital asset, then that puts the business on another footing altogether.
The first question that requires consideration is whether sub-section (4) of section 5 deals with the same class of persons as are said to have been grouped together Lawyers in Chandigarh
subsection (1) of section 5 as persons who to a substantial extent evaded payment Lawyers in Chandigarh
of taxation on income: in other words, does sub-section (4) of section 5 confer an the Commission the power merely to add to the number of persons included in section 5(1) by, the Central Government or does it confer larger power on the Commission.
It was pointed out, that the above judgment was rendered on 10. Sub-section (1) of section 5 provided that where the Central Government "has prima facie reasons for believing that a person has to a substantial extent evaded payment of taxation on income", while clause (a) of section 5(4). On a plain reading of the section it is clear that the subsection is not limited only to persons who made extraordinary profits and to a substantial extent evaded payment of taxation on income, but applies to all persons who may have evaded payment of taxation on income, irrespective of whether the evaded profits are substantial or insubstantial.
Thus, if labour saving machinery was acquired, the cost of such acquisition cannot be (1)  15 I. The said section also provides that "notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, or in any notification, order or direction issued thereunder or in any other law for the time being in force, no other court (i. it may 460 make a report to the Central Government. 1101 defines 'Court' for the purposes of Part III and Part III-A of the Act as "the High Court exercising jurisdiction in the place where the registered office of the Banking Company concerned, which is being wound up, is situated".
" It does,not repeat the phraseology used in section 5(1) that some person other than the person whose case is being investigated "have to a substantial extent evaded payment of taxation on income. (6) Where the defendant claims to set-off against the applicant's demand any ascertained sum of money legally recoverable by him from such applicant, the defendant may, at the first hearing of the application, but not afterwards unless permitted by the Tribunal, present a written statement containing the particulars of the debt sought to be set-off.
Justice Mahajan as he then was, in the terms following: 985 In Benarsidas Jagannath, In re(1), a Full Bench of the Lahore High Court attempted to reconcile all these decisions and deduced the following broad test for distinguishing capital expenditure from revenue expenditure. There is no provision Lawyer in Chandigarh
the Act that the drawee is as such liable on the instrument, the only exception being under section 31 in the case of a, drawee of a cheque having sufficient funds of the customer in his hands; and even then, the liability is only towards the drawer and not the payee.
In other respects also the phraseology of the section is different from that employed in sub-section (1) of section 5. " On no principle of construction of statutes can the words to a "substantial extent" be read in sub-clause (a) of section 5(4). The prima facie belief of the Central Government is substituted by the expression "The Commission has reason to believe". The opinion of the Full Bench was delivered by Mr. He contended that to reject the votes of the electors for the failure of the polling officer to deliver the correct ballot papers under Rule 23 would be to disfranchise them, and that a construction which involved such a consequence should not be adopted.
From the cited judgment, learned counsel for the appellant placed reliance on the following observations: (i) Reliance was first placed on the Allahabad Bank case1. Under section 32 of the Negotiable Instruments Act, 1881, the liability of the drawee arises only when he accepts the bill. On the phraseology employed in the sub-section it is difficult to read therein the limitations contained Advocates in Chandigarh
sub-section (1) of section 5 as contended for by the learned Solicitor-General.
Next is section 45-B (1) which is in the following terms: a court other than the one as above defined) shall have jurisdiction to entertain any matter relating to or arising out of the winding up of a banking company". Sub-section (4) which has been set out above Lawyer in Chandigarh
clear and unambiguous terms provided that where the Commission "has reason to believe that some person ther than the person whose case is being investigated has evaded payment of taxation on income.