MESSRS. ASSOCIATED CLOTHIERS LTD. vs COMMISSIONER OF INCOME-TAX, CALCUTTA

The Supreme Court held that the sale of assets between two companies does not qualify as 'in substance to self' under Section 10(2)(vii) of the Indian Income-tax Act, 1922. The Court found that the transaction involved a stated consideration that was not merely notional, and since the consideration exceeded the original cost of the asset, the difference constituted profit as per the second proviso of Section 10(2)(vii). The High Court's ruling was overturned, affirming the applicability of the tax provision to the transaction.