TMI Blog1949 (11) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... already taxed, or any part thereof may be deemed in law to be the income, profits or gains of the 'previous year' which can be assessed to income-tax in the assessment year 1938-39 ? The assessee is a Hindu undivided family. The assessment year in question is 1938-39 and the account year began on the 28th of September, 1936, and ended on some date in September, 1937. The assessee carries on business in Kanpur. This Hindu undivided family was a partner in the Upper Indian Ghorwari Collieries at Hirdaigarh in the Central Provinces (hereinafter referred to as the collieries ). The share of the family was six annas. The collieries was assessed to income-tax in the Central Provinces and the assessment used to be made by the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 572. The account had not been finally closed and the surplus balance was carried over to the next year. The Income-tax Officer further found that there were items amounting to ₹ 48,700, received from the collieries in the Sambat year 1992-93, which were entered in the cash book, but which were not posted in the ledger account of Budhulal Jagannath. These items were received on seven dates. In the Sambat year 1993-94 these sums were taken away by one Chunni Lal. A further sum of ₹ 37,385 had been debited to Hirdaigarh Collieries account and credited to Chunni Lal's account at the close of the business, i.e., in September, 1936. It was originally claimed that Chunni Lal was some sort of a sub-partner of the Hindu undivid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the previous year merely on that account. The argument on behalf of the Commissioner of Income-tax is that, as the ledger account of Budhulal Jagannath was a running account up to the time when the collieries business was carried on and as the collieries business came to an end on the 15th September, 1936, and several months must have been required to wind up the entire business, the balance left over after the business was finally wound up should be deemed to be the profit of the previous year. Reliance has been placed on behalf of the Commissioner of Income-tax on the decision of their Lordships of the Judicial Committee in the case of Commissioner of Income-tax, Bihar and Orissa v. Maharajadhiraja Kameshwar Singh of Darbhang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income for a particular year as consisting in part of actual receipts in that year and in part of sums carried by the assessee to income account in that year out of the receipts of previous years which have been held in suspense and no part of which has previously been returned as income. Their Lordships do not find that the Income-tax Officer in the present case has acted in any way illegally in computing the profits of the transactions in question for the year 1332 Fasli by taking into account both actual receipts of interest in that year and sums treated by the assessee in that year as receipts of interest by their transference to the interest register from what for this purpose may be regarded as a suspense account. It would be clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made in the previous year. The sum of ₹ 48,700 was not even entered in the ledger of Budhulal Jagannath. The money was received in Sambat 1992-93, that is prior to the previous year, the receipt of the money was entered in the cash book and then the amount was transferred to the account of Munnilal Chunnilal, Chunnilal Shambhu Nath and Jagannath Jageshwar. I fail to see how these sums could be said to have been treated as profits which had accrued to the assessee in the year in question, i.e., in the Sambat year 1993-94. It is true that these are sums which have never borne tax. It is also true and the fact was not disputed that these are suppressed profits but I fail to see on what material it can be held that the assessee dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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