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TMI Blog1940 (8) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... held that whenever the facts give rise to a consequential question whether there is or is not a succession within the meaning of Section 26 (2) of the Income-tax Act a question t' law is involved. As Leach, j., said in his judgment in that case, the proper legal effect of a proved fact is essentially a question of law. Consequently, in exercise of our powers under Section 66 (4) of the Income-tax Act, by our order of the 5th February 1940, we requested the Commissioner of Income-tax to restate the point for decision, and to provide us with a further and more complete statement of the facts. He has now done so, and the question which is now submitted for our decision reads as follows:- Whether on the facts stated in the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the person succeeding should have succeeded his predecessor in carrying on the business as a whole . With the greatest respect, I am in entire agreement with this observation. 4. A Hindu undivided family, trading under the vilasam of A.L.V.R.P., carried on the business of banking and money-lending at Madras, Klang, Colombo, Rangoon and Myitkyo. The head office of the family was at Devokottai, in the Madras Presidency. Up to and including the year 1936-37 the income of the family was assessed to income-tax, as a Hindu undivided Family, in Madras. Following upon the separation of Burma from India, the income of the family in Burma, that is, from the businesses at Rangoon and Myitkyo, was assessed at Rangoon for the year 1937-38. In the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whatever one many wish to call them, belonging to the undivided family, and to decide whether the family was carrying on one business, or a number separate businesses. To- my mind, it is clear that the family was carrying on, not a number of separate businesses, but a number of branches in different places of the same business, and until the new partnership applied for the benefit of Section 25 (3) this was the view of the Income-tax authorities. The family carried on exactly the same kind of business at Madras, Klang, Colombo, Rangoon and Myitkyo, the head office being at Devakottai. At each place there was an agent in charge, but he was in constant communication with Devakottai, and received his orders from Devakottai. The policy of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch shop , as the Commissioner now prefers to call the business carried on at each place, was dependent on the other shops and intimately connected with them, and directly negatives the contention that a separate business was carried on by the undivided family at each place. 6. In the 1937-38 assessment, the family claimed a deduction against profits on account of the interest debited in the Rangoon accounts and credited in the Devakottai accounts, and this deduction was disallowed on the ground that it was payment made to self , that is, the Rangoon branch was treated by the Income-tax Officer as .part of the Devakottai business. The same claim was made and disallowed again in the assessment for 1938-39. It is manifestly unjust for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was the relationship of the partnership business with the former joint family business in Burma, and this could not be decided without taking into consideration the nature of the whole family business wherever situated, for the business in Burma was a part of the family business, perhaps a distinct business; perhaps not. 12. In Section 26, clause (2)) of the Act. the words business, profession, or vocation appear to be used as if they were in some sense analogous. 13. I agree with my learned brother Dunkley that it is not possible to regard the various operations of the joint family in different countries as being separate businesses. They were all very intimately connected together under the one organisation and control. The bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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