LAWS(KER)-1954-7-9

KUNJIPPU Vs. INCOME TAX OFFICER

Decided On July 26, 1954
KUNJIPPU Appellant
V/S
INCOME-TAX OFFICER Respondents

JUDGEMENT

(1.) THE only contention pressed before me is the one embodied in paragraph 11 of the petitioner's affidavit dated 31. 3. 1953: "s. 13 of the Finance Act 1950 in so far as it purports to retain the Cochin Income Tax in its entirety including the provisions in the said Act relating to income on capital gains which provisions are non-existent in the Income Tax Act of Travancore is unconstitutional in so far as it discriminates between the subjects of one and the same State. THE said provision violates Art. 14 of the Constitution and is to that extent void. "

(2.) THE assessment year concerned is the Malayalam year 1123 (accounting year 1122 ). THE original order of assessment in respect of that year demanded a tax of Rs. 1,713-8-0 and the said amount was duly paid. Subsequently a further sum of Rs. 4,487-5-0 was demanded by Ext. I, an assessment order dated 12. 1. 1952, and the controversy before me is about the validity of the subsequent demand which has been confirmed in appeal by the appellate Assistant Commissioner by his order dated 23. 4. 1952 and by the commissioner of Income Tax in revision by his order dated 23. 1. 1953. THE relevant portion of Ext. 1 reads as follows: "this is a proceeding under S. 44 of the Cochin income Tax Act initiated on the discovery that the assessee had sold in the year of account a house property at Ernakulam for Rs. 20,000/- and had made capital profit. This however was not disclosed by him for his assessment of the year. Notice was therefore issued to him under S. 44 of the Cochin Income Tax act and the assessee has filed a revised return showing a capital profit of Rs. 3,000/ -. In evidence Mr. P. V. Seshadri Iyer, the assessee's auditor-Representative appeared and stated that the property was purchased by the assessee in the year 1118 M. E. for a consideration of Rs. 2, 743-8-0 and that he had spent a sum of Rs. 12,000/- for its extension and improvements. A further sum of Rs. 1,000/- is claimed as brokerage paid by him for the sale. Thus, according to the Auditor the total cost to the assessee on this property at the time of sale was Rs. 15743-8-0 and the profit earned is only the balance of Rs. 4,256-8-0 as against Rs. 3,000/- shown by him in the revised return filed. When he was asked to substantiate the claims for expenses such as extension and improvement and brokerage paid, he informed me that he is not in a position to adduce any evidence at all. THE assessee being a business man with pucca accounts I do not understand why those huge expenses, if they were real as alleged, do not find a place in his accounts. Further my enquiries show that the building was not at all subjected to any such extensions and structural alterations and in fact the brokerage of Rs. 1,000 which the assessee claims to have been paid was really paid by the purchaser Sri. K. V. Padmanabhan and that too only Rs. 500 to one Sri. Sandhayavu who negotiated the sale. In these circumstances I would give credit to the assessee only an estimated sum of Rs. 2,256-8-0 for petty repairs done. THE excess that can be assessed under capital profits in thus fixed at Rs. 15,000/-".

(3.) THE decision of the majority of the judges in AIR 1951 sc 128 clearly supports my conclusion. THEy held that the Constitution is not retrospective in operation, that there was no such thing as fundamental rights prior to the Constitution, that any question of inconsistency of existing laws with fundamental rights can only arise on and from the date those rights came into being and that the preservation of past inchoate rights or liabilities and pending proceedings to enforce the same is not foreign or abhorrent to the constitution of India.