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TMI Blog1962 (8) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... ly against the assessments of 1942-43 and 1941-42. It is common ground that in pursuance of this scheme the assessee obtained reductions of his tax liability in respect of losses computed at ₹ 65,197 and ₹ 1,29,028 during those two years. In the post-war year, a War Damages Commission was constituted in the Federated Malay States and persons whose properties had suffered damage as a result of the war were granted compensation. During the period relevant to the assessment years 1954-55 and 1956-57, the assessee received compensation amounts of 14,169 dollars and 5,479 dollars respectively. These amounts were brought to assessment by the Income-tax Officer in the respective accounting years. The assessee appealed against the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipts of 13,889 dollars and 5,479 dollars constitute income of the assessee for assessment in the years 1954-55 and 1956-57 respectively? 2.Whether replantation dividend receipts of 20,272 dollars and 14,408 dollars constitute income of the assessee for assessment in the years 1954-55 and 1956-57 respectively? At the outset it may be emphasised that the assessee was a dealer in properties and the loss occasioned as a result of the war was in fact taken into account in assessing the liability of the assessee. This loss was however set off against the assessment year 1942-43 firstly and any remaining loss was carried backwards to the assessment year 1941-42. We have stated earlier the precise amounts in respect of which allowance wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e books of the assessee notwithstanding the allowance for the loss in the scheme period. He claims from the war years onwards the value of the assets continued to be carried on in the books of the assessee without being written off. If that is so it is urged that only the difference between what was received from the War Damages Commission and the book value of assets should be treated as income in his hands. The question is whether this is correct. It is no doubt true that in a decision of this court in Muthiah Chettiar v. Commissioner of Income-tax [1959] 35 ITR 339 , it was held that from a purely legal point of view, the special scheme under which certain reliefs were given to the assessee only brought into existence an agreement bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready pointed out that no material was produced by the assessee to establish that any part of this receipt covered a loss of a capital nature. The further argument of the assessee is that since the lost or damaged assets retained a certain value in his books of account, only the difference between the amounts received by him and the book value of the assets should be brought to tax. Here again, we are unable to agree with the assessee. While the authority of the decision of this court in Muthiah Chettiar v. Commissioner of Income-tax1 establishes that the taxability of any receipt must be rested upon the provisions of the Indian Income-tax Act, and cannot be maintained on any of the provisions of the special scheme, there is no doubt th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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