9911796707
TMI Blog1979 (2) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ber, 1960, to 31st August, 1961, and in the relevant assessment year 1962-63, after the income of the firm was assessed to tax, the assessee's share income from the firm for the said previous year, that is, 1st September, 1960, to 31st August, 1961, worked out to Rs. 1,47,378. In the assessment proceedings before the ITO, the assessee had contended that the share income from the firm accrued on 31st August, 1961, that is, after the close of the relevant accounting year of the assessee, on 31st July, 1961. Therefore, according to the assessee, the share income should be included in the assessment for the assessment year 1963-64 and not 1962-63. This contention was rejected by the ITO. In appeal, the AAC taking the view that the facts in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ?" Mr. Pandit appearing on behalf of the revenue has argued that both the AAC and the Appellate Tribunal have overlooked the fact that the share income of the firm and the income of the assessee-company from other sources both accrued in the relevant assessment year 1962-63 and, according to Mr. Pandit, merely because the previous year of the firm ended on 31st August, 1961, that is, after the end of the previous year of the assessee-company, the share income need not necessarily be included in the assessment year subsequent to the assessment year 1962-63. On a perusal of the relevant provisions of law it appears to us that the Tribunal has overlooked the important fact that the assessment year in respect of both the previous years, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned, the assessment year in respect of such income will be the same as the assessment year of the firm. The question is, where such is the position, that is, where an assessee has a different previous year in respect of his other income and the previous year in respect of his share income from the firm is the same as the previous year of the firm, must the income of the assessee by way of his share in the income of the firm be brought to tax in a later assessment year if the previous year in respect of the firm- income ends after the previous year in respect of his other sources ? It is necessary to refer to s. 4, which is the charging section, and the main part of s. 4(1) reads as follows : " Where any Central Act enacts that inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rces were different. The accounting year of the firm of which the assessee was a partner closed on 30th April, 1958, and the assessee's share income was, therefore, determined for the year ending 30th April, 1958. The relevant assessment year of the firm was, therefore, 1959-60. The accounting year of the assessee for income from other sources was 1957-58 ending on 31st March, 1958. The relevant assessment year for this income was 1958-59. The question was whether the share income of the assessee in the firm was assessable in the assessment year 1958-59 or in the following year 1959-60. Referring to the definition of " previous year" in s. 2(11)(ii) of the Indian I.T. Act, 1922, which is similar to the definition in s. 3(1)(f) of the I.T. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year in respect of other sources of income of the assessee, fell in the financial year 1961-62 and the relevant assessment year in respect of both the previous years would be 1962-63. The ratio of Rowther's case [1962] 46 ITR 259 (Ker) was, therefore, clearly not applicable to the case before us. It is apparent, therefore, that both the AAC and the Tribunal had erred in holding that the share income of the assessee could not be brought to tax in the assessment year 1962-63. Consequently, the question referred to us must be answered by holding that the share of profit received by the assessee company from the firm of " M/s. McKenzies Ltd. Oriental Timber Trading Corporation Pvt. Ltd. " from 1st September, 1960, to 31st August, 1961, was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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