9911796707
|
Home
Issues:
1. Interpretation of Section 24-B and Section 26(2) of the Income Tax Act in cases of succession to a deceased person's business. 2. Assessment of income tax on the estate of a deceased person and determining the liability of the executor, administrator, or legal representative. Analysis: The judgment by the Madras High Court delves into the interpretation of Section 24-B and Section 26(2) of the Income Tax Act in cases where a person dies leaving a business. The reference arose from the assessment made on the Receivers of the estate of a deceased individual who passed away in 1938. The Court had to determine whether the assessment should be made on the Receivers under Section 24-B or split into two portions under Section 26(2) and Section 24-B. The Court analyzed the historical context, including previous judgments, such as Commissioner of Income Tax v. Reid and Maharajadhiraj Of Darbhanga v. Commissioner of Income Tax, Bihar and Orissa, to interpret the legislative intent behind these sections. In the present case, the Court considered the provisions of Section 26(2) before its amendment in 1939, which allowed for the assessment to be made on the person succeeding to a business as if they had carried on the business throughout the previous year. The Court highlighted that Section 24-B was inserted to complement Section 26(2) and rectify the issue identified by the Bombay High Court. The Court emphasized that Section 24-B did not override Section 26(2) as interpreted by the Privy Council, indicating that Section 26(2) should be applied in cases of succession to a business by death, and the tax should be levied on the successor as if they had operated the business throughout the previous year. Ultimately, the Court agreed with the decision of the Appellate Tribunal and answered the question referred by stating that Section 26(2) should be applied in cases of succession to a business by death, and the tax liability should be on the successor as if they had conducted the business throughout the previous year. The respondents were awarded costs amounting to &8377;250, and the reference was answered accordingly.
|
