TaxTMI 
TaxTMI 
1996 (1) TMI 169
X X X X Extracts X X X X
X X X X Extracts X X X X
....alance amount was paid to the assessee. In the assessment the Assessing Officer brought to tax the prize amount after allowing deduction for the agent's commission, collection charges, etc. Before the Assessing Officer, the assessee claimed Double Income-tax Relief with the plea that on the same income the Sikkim Government as also the Indian Government had levied tax. The claim was not allowed. 3. In the first appeal, the Dy. CIT (Appeals) held that Sections 90 and 91 of the Income-tax Act dealing with Double Income-tax Relief would not apply in this case as during the relevant period Sikkim was a State in India. The appellate authority held that as the Sikkim Government had deducted Rs. 8,088 as tax and paid the assessee only the balance....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he income which had suffered tax in Sikkim. It was submitted that not only under equity but also on a harmonious construction of the provisions of Section 26 of Finance Act, 1989 read with Section 91 of the Income-tax Act, the assessee was entitled to Double Income-tax Relief on the lottery income, which had suffered tax of Rs. 8,088 in Sikkim and then with the present assessment under the Tax Laws in India. The learned counsel also referred to the decision of the Calcutta High Court in the case of Anjan Banerjee v. Union of India [1994] 207 ITR 130. 5. Apart from claiming Double Income-tax Relief, the counsel raised another contention that the assessment in this case was bad in law as according to him, no tax was leviable under the Income....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Article 371F(k). 6. The Departmental Representative who appeared for the department strongly supported the order of the first appellate authority and submitted that it was incorrect to consider Sikkim as a country outside India after 1975, for the purpose of Double Income-tax Relief under Section 91 of the Income-tax Act. Simply because Income-tax Act had not been made applicable, it cannot be said that Sikkim was a foreign country, even after the merger with India, the Departmental Representative contended. As regards the assessee's argument that the present assessment was not authorised by law, the Departmental Representative submitted that it was a constitutional issue, not coming under the Income-tax Act. 7. Section 91 of the Income-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppointed as the date on which the Income-tax Act, 1961 shall come into force in the State of Sikkim. The assessee's contention is that as the Indian Income-tax Act came into force in Sikkim w.e.f. 1-4-1989, during the period prior to that date Sikkim should be deemed to be a country outside India for the purpose of section 91 of the Income-tax Act, 1961. The Dy. CIT(A) has taken the view that merely because the Income-tax Act has not been made applicable to Sikkim, it cannot be deemed to be a foreign country, during the period from 26-4-1975 to 1-4-1989. We are not persuaded to take a different view in the matter. There is no merit in the contention that Sikkim should be deemed to be a country outside India, even after its merger in the Uni....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t and separate from the Income-tax Act, which levies a tax on the " total income " of every person to be calculated in the manner laid down in the Income-tax Act." It can thus be seen that the assessee has been taxed twice under different laws (and not under the same tax law), even though on the same income. Section 5(1) of the Income-tax Act provides that the total income of any previous year of a person who is a resident includes all incomes from whatever sources derived which--- (a) is received or is deemed to be received in India in such year by or on behalf of such person ; or (b) accrues or arises or is deemed to accrue or arise to him in India during such year, or (c) accrues or arises to him outside India during such year. The ....