1966 (5) TMI 3 - HC - Income Tax

Amount received as dividend income and as commission and salary - held that these two items of Rs. 2, 48, 341 and Rs. 2, 39, 070 were brought into British India or received by the assessee at Ajmer within the meaning of s. 4(1) and consequently also within the meaning of s. 14(2)(c) of the IT Act

Summary

Issues:
1. Determination of income ownership between Hindu undivided family and individual.
2. Adoption of different previous years for income taxation.
3. Taxability of income accrued outside British India.
4. Assessment of income received in British India.

Analysis:
1. The judgment addressed the question of whether income from managing agency commission and allowance belonged to the Hindu undivided family or the individual. The Income-tax Appellate Tribunal found material supporting the income belonging to the family, and the court upheld this finding against the assessee.

2. The issue of adopting different previous years for income taxation was discussed. The court clarified that different sources of income can have different previous years, even if they fall under the same head of income. The Tribunal's previous assessment practices were considered, and it was determined that the income from commission and salary was correctly assessed based on the calendar year as the previous year.

3. The court examined the taxability of income accrued outside British India. It was established that the dividend income accrued at Bhilwara and was later brought into British India, making it assessable income for the relevant assessment year. Similarly, the commission and salary income for the calendar year 1942 accrued outside British India and was brought into British India during the relevant previous year.

4. The assessment of income received in British India was also deliberated. The court found that there was sufficient material for the Income-tax Appellate Tribunal to conclude that the sums in question were brought into British India or received by the assessee at Ajmer, falling within the provisions of the Income-tax Act. Therefore, the assessment of income received in British India was upheld against the assessee.

In conclusion, the court provided detailed analyses and answers to the four questions referred, affirming the decisions made by the Income-tax Appellate Tribunal. The record was returned to the Tribunal with the court's responses, and the assessee was directed to pay the costs of the department along with the assessed counsel's fee.