9911796707
TMI Blog1941 (11) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... set out in the reference by the Commissioner of Income-tax cannot be accepted. The facts are very simple. In the year 1936-37 one Muhammad Ibrahim was the agent of the Standard Oil Company in Trichinopoly. There were two agencies for the Burmah Shell Company in that district, one being conducted by Ramakrishna Chettiar and the other by G. Srinivasalu Naidu respectively. They had agencies in other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointly as a firm and on the 7th February 1939 a formal deed of partnership was drawn up with effect from the 1st May 1938. The firm was then registered under Section 26-A of the Income-tax Act. For the year 1938-39 the firm returned a loss of ₹ 7,014 in respect of the year 1937-38. The firm was not, however, liable to assessment in respect of that year because it had not carried on busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad received the attention of the Income-tax Officer when he was assessing Ibrahim in 1937-38. He considered the whole question then and came to the conclusion that ₹ 20,000 of the sums entered in the suspense account represented secret profits. He assessed Ibrahim accordingly. When it came to assessing the firm of Ibrahim and Srinivasalu in 1938-39 the Income-tax Officer was not satisfied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 66 (3) This Court directed that this should be done and framed the question as follows :- In including the sum of ₹ 26,699 in the amount of the taxable income for the year of assessment 1938-39 were the Income-tax authorities acting in accordance with law? It is obvious that the Income-tax authorities were not acting in accordance with law. Even assuming that there was justif ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
