1973 (2) TMI 5 - SC - Income Tax

Not Ordinarily Resident - Tribunal was right in its conclusion that the remittance of Rs. 2 lakhs from Burma to India during the year 1947 is not proved to be the capital asset of the assessee. Hence, there is no reason to interfere with that finding of the Tribunal. In this respect also we are fully in agreement with the High Court

Summary

Issues:
1. Determination of the assessee's residential status for the assessment year 1947-48.
2. Assessment of the amount remitted from Burma to India in the year 1947.

Analysis:

Issue 1: Determination of Residential Status for 1947-48
The case involved determining whether the assessee was a "resident" but "not ordinarily resident" in India during the calendar year 1947. The court analyzed Section 4A(a)(iii) of the Income-tax Act, which sets out the criteria for an individual to be considered a resident in the taxable territories. The court examined whether the assessee met the conditions regarding the duration of stay in India, specifically focusing on the period from 1943 to 1946 and the two-month stay in 1947. The burden of proof to establish that the visit to India in 1947 was occasional or casual rested on the assessee. The court referred to precedents to emphasize that the onus lies on the assessee to prove the casual nature of the visit. The court found that the assessee failed to provide evidence or reasons for the visit, leading to the conclusion that the visit was not occasional or casual. The absence of business in India during the visit did not absolve the assessee from proving the casual nature of the visit. Consequently, the court upheld the High Court's decision in favor of the revenue on this issue.

Issue 2: Assessment of Remitted Amount from Burma
Regarding the remittance of Rs. 2 lakhs from Burma to India in 1947, the assessee claimed it was a capital asset and not business income. The court noted the lack of explanation from the assessee regarding the remittance and the purchase of a house in Calcutta in 1948. The burden of proof was on the assessee to demonstrate that the remitted amount was not business income. Despite opportunities, the assessee failed to produce account books to support the claim. The court dismissed the contention that certified photostat copies of accounts were sufficient evidence, emphasizing the lack of reference to these documents in the Tribunal's order. As the assessee did not raise this issue during the proceedings, the High Court was justified in not considering those documents. Ultimately, the court agreed with the Tribunal's finding that the remitted amount was not proven to be the assessee's capital asset. Consequently, the court upheld the High Court's decision on this issue as well.

In conclusion, the appeal was dismissed, affirming the High Court's judgment in favor of the revenue, and the assessee's contentions regarding residential status and the remitted amount were not upheld.