DHARAMSAY KAPURCHAND GANDHI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a reference by the Income Tax Appellate Tribunal, Madras Branch B, under S.113(1) of the Travancore Income Tax Act, 1121, corresponding to S.66(1) of the Indian Act. The question referred is:

(2.) The assessment is for the year 1125 M. E. in respect of the accounting period, Samvat year 2004. The assessee became a resident in Travancore in Samvat year 2003. He had previously been carrying on business at Bombay, that is, outside the Travancore State and so made profits to the extent of Rs. 46,613/- for the Samvat years 1999 to 2004. A sum of Rs. 45,000 out of this was remitted into the Travancore territory on 20-9-1948 in the year of account. On the department seeking to include this sum of Rs. 45,000 in the total income of the assessee, he conceded that Rs. 15,000 out of it may be taxed as unremitted profit taken into account for rate purposes for the year 1124 M. E. and another sum of Rs. 4,738/- which had accrued outside Travancore - Cochin State in the year of account. However in respect of the balance of Rs. 25,262/- which is the amount mentioned in the order of reference, he raised the objection that the amount had accrued prior to Samvat year 2003, while yet he was not a resident of Travancore and the mere fact of remittance into Travancore in the year of account will not render the amount chargeable. The Income Tax Authorities uniformly overruled this objection and hence this reference.

(3.) The question depends upon the proper construction of S.4(1)(b)(iii) of the Travancore Income Tax Act, 1121, corresponding to almost similar provisions in the Indian Act. Now S.4, sub-s.(1) says :