1969 (2) TMI 49 - HC - Income Tax

Assessee is a resident and an ordinary resident within the taxable territories - Whether there was evidence or material before the Tribunal for its conclusion that the interest received by the assessee in the Part B State had been brought into the taxable territories - Held, yes

Summary

Issues:
Taxability of interest earned in a Part B State and brought into taxable territories.

Analysis:
The judgment involves the taxability of interest earned by an assessee in a Part B State and whether it was brought into the taxable territories. The assessee, engaged in moneylending in Calcutta, had fixed deposits in a bank in a Part B State. The Income-tax Officer included the interest on these deposits in the assessee's total income, as he believed it was brought into the taxable territories. The Appellate Assistant Commissioner and the Tribunal upheld this decision, stating that the department had established that the interest was brought into taxable territories. The Tribunal noted that the assessee failed to explain the utilization of the interest and had taken overdrafts in Calcutta against these deposits, supporting the department's stance.

The assessee contended that the revenue had to prove the interest was brought into taxable territories for it to be taxable. The court referred to relevant provisions of the Indian Income-tax Act, 1922, stating that interest accrued outside taxable territories is taxable unless proven otherwise. The burden of proof lies on the department to show that the income falls within the taxing provision. The court cited precedents emphasizing the burden of proof shifting to the assessee if the income is of a taxable nature but falls within an exemption under the Act.

The court further highlighted that in its advisory jurisdiction, it does not assess the sufficiency of evidence before the Tribunal. As long as there is some evidence supporting the Tribunal's conclusion, the High Court will not interfere with the finding of fact. In this case, the court found that there was sufficient evidence and material before the Tribunal to support its conclusion that the interest earned in the Part B State was brought into taxable territories. Therefore, the court answered the referred question in the affirmative, ruling against the assessee and directing them to pay the costs of the reference. The judgment was concurred by both judges.