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TMI Blog1941 (8) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... y earn till the timber is sold in India. In the accounting year they sent timber valued at ₹ 11,09,512 to India for sale and the excess over that figure at which it might be sold would be a profit. Hence the respondents computed the commission they would receive upon sales and reached a notional figure which was accepted by the Commissioner. After allowing for losses in connection with the business in Rangoon as opposed to profits in Moulmein, and for depreciation, the sum of ₹ 10,150 was arrived at. The question is whether in addition to this sum they received other profits from British India. What they received from British India was a sum of ₹ 10,02,450. It is perfectly true that profits were made in India from the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han their costs. The business in Burma no longer has the timber nor has it received the full value of the timber much less any profits connected with its sale. The Commissioner appears to recognize in para 7, Annexure B, that the remittances do not cover the value of the timber exporter and that there is no apparent reason why profits arising from other sources should be brought to Burma. In Scottish Provident Institution v. Allan [1903] 4 Tax Cas. 591, Lord Chancellor Halsbury said: This is a large amount of profit which has been made, a large amount which, out of profits, has been remitted to this country. It that is true, then income-tax is payable upon it. If that is not the extract amount, but the parties would be able to show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived some part before there could be a remittance of some part of the profits the amount remitted would have to exceed the admitted price of the commodity sold. This question must therefore be answered in the negative. The Commissioner must pay the costs of this reference; Advocate's fee 15 gold mohurs; and the respondent is entitled to the refund of his deposit. DUNKLEY, J.--I agree. At the end of para 6 of his order in revision, from which this reference arises, the Commissioner of Income-tax said in regard to the present case: There is no question of drawing any inference from facts, much less of entering the domain of presumption, in determining the character or the purpose of the remittances. That is undoubtedly correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en challenged by the income-tax authorities, and the assessee might have been called upon to prove the actual cost of production, but he was not and the assessee's figures were accepted by the income-tax authorities. Hence the value of the timber consigned to India, as shown in the assessee's books of account, repre sented the cost of production of that timber in Burma. Up to that amount all remittances from India were therefore remittances of working capital. Since the total remittances were less than that amount, there was no remittance of profits, and the question referred must be answered in the negative. SHAW, J.--I agree and have nothing further to add. Reference answered in the negative. - - TaxTMI - TMITax - Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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