9911796707
TMI Blog1970 (4) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... e other was with Messrs. Heera Traders Private Ltd. Between 20th April, 1957, and 17th December, 1957, various amounts aggregating to Rs. 39,575.25 were credited to the assessee's account with Mulchand by various drafts from Singapore. On 16th January, 1958, a sum of Rs. 18,700 was credited in the assessee's account with Messrs. Heera Traders Private Ltd., being a draft received from Singapore. The aggregate of these two amounts being Rs. 58,275.25 has been brought to tax under the order of the Tribunal. The question of law referred is : " Whether, on the facts and in the circumstances of the case, the sum of Rs. 58,275 was chargeable to tax under section 4(1)(b)(ii) read with the second proviso for the assessment year 1958-59 ? " An affidavit of the assessee dated 14th March, 1958, appears to have been filed during the assessment proceedings and a copy thereof is annexed as annexure " F " to the statement of the case and forms part of it. It may be stated that the order of the Tribunal is with regard to the assessee's assessment for the two assessment years 1953-54 and 1958-59. This reference, however, concerns only the latter year and we will omit any reference to the forme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the previous year itself and therefore they could not be said to be any profits of his business till after the year had ended. The second contention of the assessee was and is that the amounts of the drafts which aggregate to the said sum of Rs. 58,275.25 were not brought into or received in the taxable territories by the assessee himself. As regards the said first contention, the assessee had contended that what had been remitted was either capital accumulated in the past or failing that the profits which had accrued to him in the years earlier than the said previous year. He further contended, relying on the said affidavit that during the said previous year he had considerable capital and assets in Hongkong and he had no business except the one in New York and that the department had led no evidence to establish any link between the remittances and the source of income in New York. He further contended that profits of a business in their very nature cannot be remitted in the very year in which they arose and that the remittances could not, therefore, be said to be remittances of profits of the said previous year. The assessee also contended that the amounts were not received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to refer to it. It is unnecessary because what is stated in the order of the Appellate Assistant Commissioner is not really necessary for us in view of the statements made in the order of the Tribunal itself. We will first deal with the assessee's contention that in any event the said amount of Rs. 58,275 is not liable to tax because the amount was not the profits of the said previous year ended 31st March, 1958, during which year the said amount was brought into or received in the taxable territories. In support of his contention the assessee contended that it is a well-settled law that when an assessment is made on remittances of profits and the profits are of the current year, i.e., the previous year relevant to the particular assessment year, it cannot be said that the remittances were made out of profits because in their very nature profits cannot be remitted in the very year in which they have arisen, because it cannot be predicated of a business that it has made any profits till the year has been completed and that it was possible to remit profits only of the past year because the profits have been made, ascertained and are available for remittance. In support of contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee outside the taxable territories during the year of account received in or brought into the taxable territories by him in the year of account itself. We may point out that Mr. Justice Sarkar of the Supreme Court of India in the case of Commissioner of Income-tax v. Dharamdas Hargovandas, while giving a concurring judgment, referred to a case of the kind before us at page 438 as under : 'Suppose again, he had put the income originally received by him at Bhavnagar in a bank there and then he obtained a draft from the bank payable in Bombay and brought the draft from Bhavnagar to Bombay and cashed it there. Again, there would be little doubt that he had, by this process, brought the income into Bombay.' In the case before us all that we know is that the assessee got some drafts at Singapore and these drafts were cashed in Bombay and he was given credit for the amounts by two parties in the taxable territories. We are, therefore, of the view that the department was justified in treating the amount of Rs. 58,275 as chargeable to tax under section 4(1)(b)(ii) read with the second proviso to the same section. " In order to appreciate the contents of this paragraph 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing more stated in paragraph 8 itself to show what profits were intended to be referred to. Even a reference to the order of the Appellate Assistant Commissioner does not improve the situation, but it is not at all difficult to know what it refers to. The only evidence produced was that contained in the said affidavit. The affidavit referred to only two sources, the first being the sum of Rs. 2,00,000 or Rs. 3,00,000 which the assessee had in Hongkong and the second being his business in New York. The contentions of the assessee all throughout had been that the amounts covered by the drafts were either out of capital or, if it not be upheld then, in the alternative, out of profits of his business, but the profits being of the years earlier than the said previous year and not of the previous year itself. It may be stated, but only as a matter of fact and not comment, that the department had itself led no evidence. The order of the Tribunal does not specifically refer to the said affidavit, but does not also reject any of the statements contained in that affidavit. The said three contentions of the assessee were based on that affidavit. The department had merely disputed those conte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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