1935 (9) TMI 7 - HC - Income Tax

Summary

Issues:
1. Determination of the year in which a remittance of Rs. 50,000 was received for income tax assessment.

Analysis:
The judgment by the Madras High Court involved a dispute regarding the year in which a remittance of Rs. 50,000 was received by the assessee for income tax assessment. The accounting year in question was from 13th April 1929 to 12th April 1930. The amount in question was debited to the assessee's account on 3rd April 1929, related to the purchase of house sites, and was paid to another party. The sale deed for the property was executed on 8th May 1929. The contention was whether the amount should be considered received on 3rd April 1929 or 8th May 1929.

The assessee argued that the amount should be deemed received on 3rd April 1929, as it was paid on that date, even though the sale deed was executed later. The Income tax authorities, however, held that the amount was received only on 8th May 1929, when the sale deed was executed. The petitioner also attempted to argue that possession of the property was obtained on 5th April 1929, but this argument was not entertained by the authorities as it was not raised earlier.

The High Court held that the money was received by the assessee on 8th May 1929, the date of the execution of the sale deed. The Court rejected the argument that a contractual right had arisen on the date of payment, emphasizing that the money was received in the form of the house-sites on 8th May 1929. The Court also declined to entertain new points raised during the proceedings, affirming that the money was received during the accounting period, making the petitioner liable to pay income tax for the year 1930-31.

In conclusion, the Madras High Court determined that the remittance of Rs. 50,000 was received during the accounting period from 13th April 1929 to 12th April 1930, and the petitioner was liable to pay income tax on that amount for the year 1930-31. The reference was answered in favor of the Commissioner of Income-tax, who was awarded costs of Rs. 250 from the assessee.