1956 (5) TMI 4 - SUPREME COURT

Whether there is any material to justify the assessment of ₹ 30,000 (Rupees thirty thousand) from out of the sum of ₹ 61,000 (Rupees sixty-one thousand) (for income-tax and excess profits tax and business profits tax purposes) representing the value of high denomination notes which were encashed on the eighteenth day of January one thousand nine hundred and forty-six ?

Whether in any event by reason of the orders of the Revenue Authorities not having found that the alleged item was from alleged undisclosed business profits the assessment of ₹ 30,000 (Rupees thirty thousand) is in law justified for excess profits tax and business profits tax purposes ?

Held that:- The High Court was in error in answering the first referred question in the affirmative. It ought to have answered it in the negative and held that there were no materials to justify the assessment of ₹ 30,000 from out of the sum of ₹ 61,000, for income-tax and excess profits tax and business profits tax purposes, representing the value of the high denomination notes which were encashed on 18th January, 1946.

In view of the above it is not necessary for us to go into the question whether the High Court ought to have answered the second referred question also. The answer to the first referred question being in the negative, the very basis for excess profits tax and business profits tax disappears and the second referred question becomes purely academical. Appeal allowed.