TMI Blog1931 (2) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in the judgment. The first two questions are really subsidiary, and the third one is, whether in law the existing assessment is valid and binding on the company. The Commissioner of Income Tax declined to raise that question taking the view that he had no power to do so. The case having been argued before us, it appears to us that that is the real question which arises, and we propose, therefore, to amend the questions raised by raising that question in addition to the two questions actually raised in the case. In doing so, we are following the view expressed by the High Court of Allahabad in Shiva Prasad Gupta v. Commissioner of Income Tax, U.P. (1929) 3 I.T.C. 406 and in the later case of Kajorimal Kalyanmal v. Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, think that any premiums paid by those entitled to participate in policies who become thereby the members of the company are not profits of the company. 4. But then the question arises, on what income ought this assessee company to be assessed? Now, in Styles' case the Commissioners of Inland Revenue, whose decision was upheld by the House of Lords, had decided, first, that no part of the premium income of the company received under participating policies is liable to be assessed to Income Tax as profits or gains, and, secondly, that the company was liable to be assessed (a) in /respect of profits made on annuities granted, (6) on profits made from premiums paid under non-participating policies, (c) on all income derived by o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, it is of course only chargeable prima facie on those sources of income in so far as they accrue or arise or are received in India. 5. Now it was the duty of the assessee company under Section 22(1) of the Indian Income Tax Act to make a, return of the total income of the company during the previous year, the total income being defined in Section 2(15) as total amount of income, profits, and gains from all sources to which the Act applies. If the company does not make a return, then under Section 23(4) the Income Tax Officer has to make the assessment to the best of his judgment. The assessee company did not make any return of the income, upon which in my view, they were liable to tax. On February 10, 1927, their solicitors wrote a l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accident, Burglary, Fidelity, Guarantee, c.), in the absence of more reliable data, may be deemed to be the proportion of the total income, profits or gains of the companies, corresponding to the proportion which their Indian premium income bears to their total premium income. It is to be observed that this rule is only to be applied in the absence of more reliable data. The learned Commissioner has, in his supplemental case referred to us pursuant to the judgment of this Court which I have mentioned, stated as a fact that he had no reliable data. I agree with him that it was not possible on the materials before him to assess this company in the manner in which, as I have indicated, I think it ought to have been assessed, I think, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits premiums paid on participating policies; he has taken the other sources of income and deducted from them the balance of expenses remaining over after the premiums on participating policies have been wiped out. Having arrived in that way at the total income, profits or gains of the company, he then under Rule 35 had to find out the proportion of the Indian income, and he did this by taking the proportion which the Indian premium income bears to the total premium income. The figures are shown in the case. The result is, I think, that the existing assessment is substantially binding on the company, though I arrive at that conclusion by a different road to that which the Commissioner took. I answer the first question--whether the premi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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