TMI Blog1948 (3) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... adopted by his uncle many years ago, that his uncle left a large fortune and it was out of this large fortune that this amount was brought into British India. The Appellate Assistant Commissioner taxed this amount of ₹ 2,01,000 under Section 4(1)(b)(iii ) of the Income-tax Act. It was found by him that after the death of his adoptive uncle the assessee did business at Indore and he failed to produce his books of account relating to that business. The Tribunal to which an appeal was preferred from the decision of the Appellate Assistant Commissioner also held that the sum of ₹ 2,01,000 represented remittances and profits received in British India by the assessee during the year and they were rightly taxed under Section 4(1)(b)(iii ). With regard to the sum of ₹ 73,779 the Tribunal held that the loss could not be set off against the sum of ₹ 2,01,000. The first question that we have to consider is whether the remittance of ₹ 2,01,000 out of profits made by the assessee in the years preceding the Maru year 1999-2000 as a non-resident could be included under Section 4(1)(b)( iii) of the Indian Income-tax Act in his total income of the year of account in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Lahore High Court, in support of his contention that inasmuch as although this particular question with regard to Section 4(1)(b) was raised in the grounds of appeal but was not dealt with by the Tribunal, the Tribunal was wrong in referring it to the High Court. The first decision is of the Lahore Court (Jamna Dhar Potdar Co. v. Commissioner of Income-tax, Punjab) reported in 3 I.T.R. 112. That was a case under the old Act find an application was made under Section 66(2) asking the Commissioner of Income-tax to state a case on certain points. With regard to the second question the Lahore High Court took the view that although a question of law might be involved as the question was not raised in the appeal to the Assistant Commissioner, the question did not arise out of the order under Section 31 of the Act and the petitioner had no right to demand that the Commissioner should refer that question. The Madras High Court dealt with the question under the present Act in A. Abboy Chetty Co. v. Commissioner of Income-tax Madras [1947] 15 ITR 442 , and took the view that a question of law can be said to arise out of an order of the Appellate Tribunal only if such order discloses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asking this Court to require the Commissioner to state the case. It was then argued that this Court had no jurisdiction to direct the Commissioner to state the case arising on a question of law not formulated before him. Various decisions of other High Courts were cited in support of that view. Beaumont, C.J., in delivering the judgment, refused to agree with the views of the other High Courts on this point and he expressly disagreed from the view of the Full Bench of the Rangoon High Court, taking the view that their view seemed to restrict the powers of the High Court in a manner not authorised by the Act. In my opinion the present attempt of the Advocate-General is also to restrict the powers of the High Court in a manner not authorised by the Act; and to confine the questions of law arising out of the order merely to those questions of law which have been raised before the Tribunal or dealt with by the Tribunal is in my opinion restricting unauthorisedly the advisory jurisdiction of this Court. Kania, J., had to consider a similar question in New Piecegoods Bazar Co., Ltd. v. Commissioner of Income-tax [1947] 15 ITR 319 . The question before the Court (Stone, C.J., and Kania, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o give that advice to the Tribunal. Now coming to the questions themselves, with regard to the first question Mr. Kola's contention is that under Section 4(1)(b)( iii) only such remittances are taxable which represent income which was earned by a resident in British India. According to him if a resident in British India earns income outside British India and then brings that income into British India, the income having been earned after the 1st of April, 1933, such a remittance into British India is taxable under Section 4(1)(b), sub-clause (iii). Mr. Kola contends that inasmuch as this particular income of ₹ 2,01,000 was earned by the assessee as a nonresident outside British India it cannot be taxed at all. Mr. Kola therefore asks us to give the word him occurring in that sub-clause a particular connotation. He wants us to read that word to mean provided that he was a resident in British India. I see no reason why these words should be interpolated in Section 4(1)(b)( iii). It is also important to note that Section 4(1)(b)( ii) deals with income of a resident in British India which accrues or arises without British India. Therefore in any particular year the tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. I would therefore answer the first question in the affirmative and the second question in the negative. The asssesee must pay the costs of this reference. Tendolkar, J.-This reference arises out of an assessment for the year 1944-45 the accounting year being S. 1999-2000 (Maru) beginning from the 9th of November, 1942. The assessee was a resident during that year but was held to be a non-resident in preceding years. Upon the commencement of his business in Bombay on the 9th of November, 1942, a sum of ₹ 51,000 was credited in the personal account of the assessee. Another sum of ₹ 1,50,000 was similarly credited on the 8th of January, 1943. These two sums aggregate to ₹ 2,01,000; and it was the case of the assessee before the Income-tax Officer that his rich uncle had died leaving him a large fortune and this amount represented a part of that fortune brought by him into British India. On this he was disbelieved and it was held that these sums represented remittances of profits received in British India by the assessee through business carried on in previous years in the Indore State. They were therefore assessed under Section 4(1)(b)( iii) and the first quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al to state a case. I, therefore, refrain from expressing any opinion on the correct interpretation to be placed on these words. With regard to the first question of law that has been referred to us, the language of Section 4(1)(b)( iii) is plain and simple. It provides that the total income of an assessee, resident in British India, shall include income, profits and gains which have accrued or arisen to him without British India before the beginning of the accounting year and after the 1st of April, 1933, and are brought into or received in British India during the accounting year. There is no doubt that in this case, on the facts found, ₹ 2,01,000 represented income, profits or gains which accrued to the assessee without British India prior to the accounting year and after the 1st of April, 1933, and, therefore in terms the sub-clause applies. But it is contended by Mr. Kola for the assessee that this sub-clause does not relate to the income which accrued or arose to a person who was a non-resident at the time when the income accrued or arose. To my mind, there is no justification for restricting the meaning of the sub-clause in this manner. It would amount to interpolat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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