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TMI Blog1938 (11) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... d ₹ 1,00,000 to the S.P. K.A. Firm of Zigon, Burma. On the 10th February 1934 the S.P.K.A. Firm repaid the loan with the interest then due, in all ₹ 1,22,659. The loan was discharged by payment of the amount to the assessee through the S.P.K.A.A.M. Firm of Rangoon. The assessee retained the money in Rangoon, it being held on his behalf by the S.P.K.A.A.M. Firm. The repayment of the loan to the P.R.A.M. Firm was effected by the debiting of the assessees personal account in that firm and crediting the Zigon firm with the amount. This was done on the 12th April 1935. The amount debited to the assessee and credited to the P.R.A.M. Firm was actually ₹ 1,26,463, the difference between this sum and the ₹ 1,22,659 representi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d admittedly profits lying to his credit in the books of the Singapore firm in excess of the amount which he retained in Rangoon. The repayment to the assessee by the S.P.K.A. firm in Burma of course operated to discharge the S.P.K.A. firm and, if the assessee had remitted the money to Singapore, no question would have arisen. But, instead of sending the money to Singapore the assessee retained it in Burma for his own purposes and, so far as the P.R.A.M. Firm was concerned the repayment came from his account with that firm. By doing this, the assessee in effect transferred the sum of ₹ 1,22,659 from Singapore to Burma and, as Burma was then within British India, it amounted to a transfer of profits to British India. It has been accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account. In Ram Rakha Mal and Sons Ltd. v. Commissioner of Income Tax, Punjab a bench of the Lahore High Court accepted the opinion put forward by the Commissioner of Income Tax. In the Commissioner of Income Tax, Bombay v. The Mazagaon Dock Ltd., RANGNEKAR J., also read the section in this way, but BLACKWELL, J., took the opposite view. BEAUMONT, C.J., answered the reference without dealing specifically with the question, but in Bhogilal Hargovandas Patel v. The Commissioner of Income Tax, Bombay President and Aden the learned CHIEF JUSTICE sitting with BLACKWELL, J., regarded the section as covering the method of computation. The reading of the section as the assessee would have it read was accepted by this Court in S. V. Karuppaswami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and transactions of the successor and the predecessors profits the profits of the successor, the contention was clearly one that the section applied for all purposes and moreover this is shown to be the ask in the judgment of BEASLEY, C.J., who observed :-"The plain reading of the sub-section is, in my opinion that the predecessors capital becomes the successors capital and that for all purposes the succeeding partner is to be regarded as the former firm. I agree with the reasons given by the Income Tax Commissioner for taking the view opposed to that put forward by the petitioner". The argument put forward by the petitioner in that case was that the loans from the ex-partners should be treated as loans from strangers, whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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