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Issues Involved:
1. Taxability of a remittance of Rs. 10,000 under Section 4(2) of the Burma Income Tax Act. 2. Admissibility of a loss of Rs. 5,137-8-0 on the sale of land and a house as a deduction in computing total income. Detailed Analysis: Issue 1: Taxability of Remittance under Section 4(2) of the Burma Income Tax Act Facts and Context: The A.K.A.R. Family, a Hindu undivided family, operates a banking and money-lending business with branches in Burma and the Federated Malay States. During the 1938-39 assessment period, a remittance of Rs. 10,000 was sent from the Taiping branch to the Ngathainggyaung branch under the instruction of a customer, Meenakshi Achi, who had a credit balance at Taiping. Income Tax Officer's Position: The Income Tax Officer included the Rs. 10,000 remittance in the Ngathainggyaung assessment, treating it as taxable foreign profits under Section 4(2) of the Burma Income Tax Act, citing the presence of sufficient profits in the Taiping business to cover the remittance. Assistant Commissioner's Position: The Assistant Commissioner upheld the Income Tax Officer's decision, arguing that the case was similar to A.K.A.C.T.V. Family v. CIT [1935] 8 I.T.C. 112, where remittances were considered taxable profits. High Court's Analysis: The court distinguished the present case from A.K.A.C.T.V. Family v. CIT [1935] 8 I.T.C. 112, noting that the remittance in question was made at the direct request of the customer, Meenakshi Achi, and not by the assessee. The court emphasized that the remittance was the customer's money and not the assessee's profits. The legal position was akin to Meenakshi Achi personally transferring her funds. Conclusion: The court concluded that the Rs. 10,000 remittance was not taxable as foreign profits under Section 4(2) of the Burma Income Tax Act. The first question was answered in the negative. Issue 2: Admissibility of Loss on Sale of Land and House Facts and Context: The assessee family took over 63.34 acres of paddy land and a house in 1928-29 in settlement of a debt of Rs. 9,000. Over the years, parts of the land and the house were sold, resulting in a total loss of Rs. 5,137-8-0, which the assessee claimed as a deduction in the accounting year when the last sale occurred. Income Tax Officer's Position: The Income Tax Officer allowed a loss of Rs. 1,500 for the house but rejected the total claimed loss, arguing that losses should have been claimed in the years they were incurred. Assistant Commissioner's Position: The Assistant Commissioner agreed with the Income Tax Officer, stating that losses should have been claimed in the respective years of the sales. High Court's Analysis: The court held that the assessee could not know the total loss until the entire transaction was completed. It was impractical to estimate losses piecemeal for each sale. The court referenced P.L.S.M. Firm's case [1935] 12 Rang. 483, which supported the view that the final loss should be assessed in the year the transaction was completed. Conclusion: The court ruled that the total loss of Rs. 5,137-8-0 was an admissible deduction in computing the profits or gains for the accounting year. The second question was answered in the affirmative. Costs: The assessee was entitled to costs against the Commissioner of Income-tax, including an advocate's fee of fifteen gold mohurs and a refund of the deposit made under Section 66(2). Judgment: The reference was answered accordingly, with all judges (Roberts, C.J., Sharpe, J., and Dunkley, J.) in agreement.
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