COMNR. OF INCOME-TAX, BOMBAY vs M/S. KANJI SHIVJI & CO.

The Supreme Court addressed the interpretation of Explanation (2) to Section 40(b) of the Income Tax Act, 1961, determining that it is declaratory in nature and thus represents the law as it existed prior to its introduction on 1st April 1985. The Court reaffirmed the conclusions reached in Brij Mohan Das Laxman Das vs. Commissioner of Income Tax and Suwalal Anandilal Jain vs. Commissioner of Income Tax, stating that the earlier judgments still correctly represent the law. Consequently, the appeal was dismissed without costs.