COMMISSIONER OF INCOME TAX Vs. DAT PATHE

JUDGEMENT

(1.) THE Income Tax Appellate Tribunal, Cochin Bench, has stated a case and referred the following question for our decision.

(2.) THE year of assessment is 1962 -63, the corresponding accounting period being that which ended On March 31, 1962. The assessee was carrying on business in timber as well as in processing cashewnuts and coffee seeds. His timber business was largely export business whereas cashew business appears to be largely internal business. He suffered a loss of Rs. 1,04,417 as far as the cashew business is concerned as computed by the assessing authority whereas in the timber business there was a profit to the extent of Rs. 2,01,107 as computed by the assessing authority. The assessee has kept separate accounts in relation to his cashew and coffee business. The sum of Rs. 96,690 mentioned in the question referred to us is the difference between the sum of Rs. 2,01,107 (profits and gains of timber business) and the sum of Rs. 1,04,417 (loss in relation to the cashew and coffee business).

(3.) THE Central Board of Revenue has made Rules and we are admittedly concerned here with Sub -rule (3) of Rule 2. But in order to understand the sub -rule which has to be interpreted by us in answering the question, it will be useful to refer to Sub -rules (1) and (2) as well. We shall extract Sub -rules (1), (2) and (3) of Rule 2 of the Income Tax (Determination of Export Profits) Rules, 1962 (hereinafter referred to as "the Rules").