9911796707
TMI Blog1940 (9) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... hen due. Accumulations of interest, it was said, had brought the figure up to ₹ 5,49,683 but this was denied. A compromise was eventually agreed upon and a decree was passed by the Subordinate Judge embodying the terms of settlement. Under this decree the debtor was to pay to the petitioner a sum of ₹ 3,75,000 in full settlement of all claims on or before July 31, 1931. In the meantime this sum was not to carry interest. In the event of the amount not being paid by the due date the Zamindari was to become the absolute property of the petitioners family. By this decree a receiver was appointed and it was a term of the compromise that any moneys which the petitioner received from the receiver should be set off against the ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In assessing the petitioner as the manager of the family for the year 1937-38 the Income Tax authorities have included the profits which they calculated has been made out of this mortgage transaction. The profit has been calculated at the sum of ₹ 2,57,998, less ₹ 84,700 which had been received towards the loan before 1924. The petitioner objected to an assessment being made on this basis and he requested the Commissioner of Income Tax to refer to this Court, under the provisions of Section 66 of the Income Tax Act, the questions raised by him. In accordance with this request the Commissioner has referred the following questions :- (1) Whether the sum of ₹ 42,000 deposited in the Court between July 1928 and July 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have already mentioned, the petitioner was never in the position of a usufructuary mortgagee. The second question also must be answered in favour of the Income Tax authorities. Year by year from 1926-27 until the year of assessment 1937-38 the petitioner was pressing the Income Tax authorities not to take into account any sums received by him on account of this mortgage, but to leave the position open until the matter had been concluded. When the petitioners agent produced from the Income Tax Officer the accounts in respect of the year 1926-27 it was found that no interest in respect of the loan to the Zamindarini had been debited and it was contended by the assessee that as the loan was the subject-matter of litigation no payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessment being made when the transaction was closed, he now says that as the amounts paid to him in cash were received by him more than three years before the year of account they are not assessable to tax. To say the least, it is not an honest contention to put forward in view of the representations made by him from year to year. But without taking into consideration the honesty or dishonesty of the petitioner or the effect of his representations it is clear that he is not entitled in law to escape assessment on the profit which was made out of this mortgage transaction. On his own showing this transaction did not close until the High Court had given its decision in 1936 and therefore it was not until that year profits could proper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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