1956 (9) TMI 76

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..... banking business in the year of account there was a large flow of money to the tune of ₹ 30,00,000 in both directions, and the net result of this flow was that there was an excess of ₹ 2,907 in British India. The Income Tax Officer considered individual items of remittances from the Indian States into India, and he came to the conclusion that four items totalling to ₹ 1,85,000 were liable to be included in the total incomes of the assessee under section 4 (1) (b) (iii). In appeal the Appellate Assistant Commissioner held, following the case reported in Commissioner of Income Tax v. Jankidas Kaluram Rewari that in view of the fact that remittances into India and remittances out of India into Indian States were more or less .....

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..... s into the taxable territories, in which case also the presumption may readily arose in respect of the excess. But the third case may be - and that is the case we are dealing with - where the flow in both the directions may be even and equal, with the result that there is no excess either way, in which case if a presumption arises at all, it would be a very weak or negligible presumptions. That is the principle of the decisions of the Punjab High Court which has been accepted both by the Appellate Assistant Commissioner and the Tribunal in Jankidas's case. But there is one circumstances in this case which was not present in Jandkidas's case and which has a peculiar significance with regard to the question that we are considering. As .....

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..... undoubtedly it was for the Department to establish that fact. Now, in this case the Income Tax Officer, has not even proved that profits were available for remittances to British India. The Advocate-General says that we must remand the matter so that the Income Tax Officer can give the necessary finding. But even if were to remand the matter and the Income Tax Officer was to find that profits were available, the difficulty would still remain whether the remittances was out of the profits or the remittances was as part of the stock-in-trade of the banking business and with regard to that the Department can only rely on the presumption that once available profits are established, the remittances must be out of those profits. But as we have j .....

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