TMI Blog1960 (10) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... y of ₹ 34,468 (gross ₹ 50,137) has been rightly brought to tax, both income-tax and super-tax, with out any concession in regard to the tax payable thereon; (b) the net dividend income, say of ₹ 2,28,392 has been rightly subjected to super-tax at Part B States rates to super-tax only? The facts briefly stated are that the assessee is a Hindu undivided family with its head office at Indore and branches at several other places in former Part B States, such as Madhya Bharat which included Indore and Gwalior States, Hyderabad (Dn.) State, Rajasthan, etc. It derives its income from several sources such as property, dividends, business, managing agency commission, shares in partnership firms, etc. The assessee family was at one time carrying on business in Bombay and was assessed in the status of a non-resident Hindu undivided family. Its business was, however, closed down for some time in 1945 and no assessment was made for the years 1948-49 and 1949-50. In the course of the assessments before the assessment year 1948-49 in the status of the assessee as a non-resident Hindu undivided family the previous year adopted by the assessee was the appropriate Diwali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paragraph 12 of the Taxation Concessions Order, 1950. It was, however, subjected to super-tax at the concessional rates mentioned in the said Order. The Tribunal rejected the contentions of the assessee that the dividend income of ₹ 2,28,392 was not subject to super-tax under paragraph 12 of the Taxation Concessions Order, 1950; that the amount of ₹ 2,62,860 should not have been apportioned as the Income-tax Officer had done and on this amount income-tax as well as super-tax could be levied only at the Part B States concessional rates ; and that in any case super-tax was payable on the entire dividend income of ₹ 2,62,860 only at the concessional rates. The Appellate Tribunal's conclusion about the assessee's previous year being the Diwali year ending on October 21, 1949, in respect of the managing and selling agency commission and the assessee not being allowed to vary it so as to adopt for this source the financial year ending on March 31, 1950, was based on the reasoning that in the assessment years before 1948, that is to say, even before April 1, 1950, the assessee was assessed in respect of the managing and selling agency commission on the footi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication as to the acts of the assessee on the basis of which it can be concluded that there has been an exercise of option. It is plain from the language of section 2(11)(i)( a) that the exercise of option in the matter of selection of the previous year must be in respect of a particular source of income, profits and gains for the purpose of assessment as understood in the sense indicated earlier. The requisites essential to option or election are well settled. For the validity of an option, it is essential that the party opting should be cognizant of his rights. The party must have the knowledge of his or her right to opt and of those circumstances which would influence the exercise of an option. In Bisheshwar Singh v. Commissioner of Income-tax [1955] 27 ITR 376 (Pat.) the Patna High Court has gone to the extent of saying that for the exercise of an option under section 2(11)(c) the assessee is bound to make some statement before the income-tax authorities to show that he had applied his mind and that he had exercised the option given to him. Even if it is held that such an express statement is not essential, there can be no doubt that the exercise of option must be demonstrably ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came taxable after April 1, 1950. Our answer to the first question is, therefore, that in respect of the managing and selling agency source of income the previous year chosen by the assessee is the year ending on March 3, 1950. The second question was not pressed by Shri Chitale, learned counsel appearing for the assessee. It is, therefore, unnecessary to express any opinion thereon. The third question is answered fully by the opinion expressed by us in Smt. Anup Prabha Bai Sethi v. Commissioner of Income-tax [1962] 44 ITR 237 (MP), where a similar question arose for consideration. In that case, after analysing the material provisions of the Income-tax Act and paragraph 12 of the Taxation Concessions Order, 1950, we expressed the following view [1962] 44 ITR 237 240 (MP): So that if a part of the profits of a company registered in a State in which there was no State law are liable to be taxed in the taxable territories other than a Part B State, the concession would none the less apply if in that Part B State the profits were not liable to be taxed. The amount of net dividend paid out of the profits which have been taxed in the taxable territories other than a Part B Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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