TMI Blog1937 (4) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... she wanted to do through her agent in Saigon, a similar business to the business which she was doing at Bassein. The moneys, of course were received by the agent in Saigon in dollars. The agent obeyed these instructions and the loans made by him on behalf of the assessee earned in interest 25,813 dollars before the beginning of the financial year 1929-30; and in the three financial years 1929-30, 1930-31 and 1931-32 they earned 21,988 dollars. In 1931, the assessee decided to bring back most of her money from Saigon and in accordance with her instructions her agent remitted 25,000 dollars which, when received in Bassein in rupees amounted to ₹ 1,32,375. Only 5,500 dollars remained in the hands of Saigon agent. When the Income Tax O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits and gains of the year in which they are so received or brought, notwithstanding the fact that they did not accrue or arise in that year, provided that they are received or brought in within three years of the end of the year in which they accrued or arose. Therefore, the assessee is clearly liable to be taxed on the profits made in Saigon and brought into this country. But it is equally clear that the profits brought in did not amount to ₹ 23,252 as the Income tax authorities would have, but only to ₹ 1,637. The Judicial Committee of the Privy Council pointed out in Commissioner of Income Tax, Bengal v. Shaw Wallace Co. that the object of the Acts is to tax 'income' which here connotes a periodical monetary ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed as a deduction for income tax purposes: Reid's Brewery Co., Ltd. v. Male. In these circumstances the loss on exchange cannot be classified as a loss of capital. The Income tax Officer started off with a presumption which he was not entitled to in face of the facts and as his presumption goes so must his assessment. The answer to the question referred is that the whole of the sum of ₹ 23,252 is not taxable under Sec. 4(2) and must be reduced by the loss on exchange. The assessee is entitled to the costs of this reference which we fix at 15 gold mohurs. He is also entitled to the return of the ₹ 100, the deposit made in connection with the reference. ROBERTS, C.J.--I agree. MACKNEY, J.--I agree. Reference answere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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