1953 (6) TMI 4 - HC - Income Tax

Summary

Issues Involved:
1. Entitlement to exemption under Section 15B(1) of the Income-tax Act.
2. Ownership and contribution of the sums in question.
3. Interpretation of "any sums" within the context of the Income-tax Act.

Detailed Analysis:

1. Entitlement to Exemption under Section 15B(1) of the Income-tax Act:
The primary issue was whether the assessees were entitled to claim an exemption for the sums of Rs. 12,078 and Rs. 10,764 respectively under Section 15B(1) of the Income-tax Act. The Tribunal had held that the amounts were paid by the assessees and were not required to be paid out of the income of the previous years relevant to the assessments. However, the High Court disagreed, stating that sums eligible for exemption must be part of the assessable income for the year in question. The sums in question were from the assessees' income of previous years (1947 or earlier) and were not included in the income assessable for the year 1949-50. Therefore, no exemption could be claimed for these sums under Section 15B(1).

2. Ownership and Contribution of the Sums in Question:
The Tribunal found that the amounts were paid by the assessees and not by the Indian Jute Mills Association. However, the High Court noted that the sums were initially paid to the Calcutta Rehabilitation Fund and later transferred to the Gandhi National Memorial Fund. The High Court emphasized that it was difficult to see how an amount contributed to a charitable fund could remain the property of the contributor. The sums in question were not part of the income of the year 1948 and thus could not be included in the assessable income for the year 1949-50.

3. Interpretation of "Any Sums" within the Context of the Income-tax Act:
The Tribunal interpreted "any sums" in Section 15B to mean any amount, regardless of its origin. The High Court rejected this interpretation, stating that "any sums" must refer to sums that are part of the assessable income for the year. The High Court clarified that exemption from tax applies only to sums that would otherwise be liable to taxation. The sums in question were not assessable income for the year 1949-50, and thus, no exemption could be granted for them.

Conclusion:
The High Court concluded that no exemption could be claimed for the sums of Rs. 12,078 and Rs. 10,764 under Section 15B(1) of the Income-tax Act. The sums were not part of the assessable income for the year 1949-50, and therefore, the assessees were not entitled to the claimed exemptions. The reference was answered in the negative, and the Commissioner of Income-tax was awarded the costs of the reference.