COMMISSIONER OF WEALTH TAX Vs. P R SHANMUGAM

JUDGEMENT

(1.) SINCE these two tax cases arise out of the common order of the Income-tax Appellate Tribunal and as they involve practically the same issue, they are dealt with together The assessee, apart from having a money-lending business, had income from property, partly residential and partly let out as also share income from four firms in India.

(2.) THE assessee in this case has been assessed in the status of an individual and a resident and ordinarily resident in the assessment years 1964-65 to 1968-69. THEse assessments proceeded on the basis that the previous year in each case is the Tamil year.

(3.) THE assessee appealed to the Income-tax Appellate Tribunal contesting the decision of the AAC upholding the validity of the reopening of the original assessment and also the reassessment on merits. THE Tribunal upheld the validity of the reopening of the assessment but cancelled the reassessment holding that the assessee was to be treated as non-resident for the assessment year in question as has been done in the original assessment.Aggrieved by the said decision, the Revenue has sought and obtained a reference to this court on the following question of law."Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in cancelling the reassessment made under the Income-tax Act, 1961, on the assessee for the assessment year 1969-70 ?" *For the same assessment year, the assessee was originally assessed under the W.T. Act as a non-resident. Subsequently, proceedings were initiated for reopening the assessment and for treating the assessee as having a residential status. THE reopening of the assessment was challenged before the AAC who upheld the reopening of the assessment as well as the adoption of the status of the assessee as a resident. THE matter was taken in appeal to the Tribunal. THE Tribunal, while upholding the reopening of the assessment, cancelled the reassessment on the ground that the assessee should be treated as a non-resident and not as a residentAggrieved by the decision of the Tribunal, the Revenue obtained similar reference to this court on the following question of law."Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in cancelling the reassessment under the Wealth-tax Act for the assessment year 1969-70 ?" *From the facts stated above, it will be seen that both for purposes of income-tax and wealth-tax, the status of the assessee was returned as "non-resident" and the same was accepted by the ITO for the following reason:"THE assessee who left India on April 8, 1968, has not so far returned to India. As he was also completely absent from India during the accounting year, the residential status declared in the return, i.e., 'non-resident' will be accepted." *Subsequently, during the internal audit, it was pointed out that the assessee had share income from firms and the previous year of those firms ended on December 31, 1971, and that the assessee had been a resident in India during the firms previous year as he had been in India for more than 30 days and had also maintained a dwelling house. THEre is no controversy as regards the factual position. During the previous year of the firms (accounting year ended December 31, 1968), relevant to the assessment year 1969-70, in respect of his share income, the assessee was in India for more than 30 days as he bad left India only on April 8, 1968, and he had admittedly a residence in India.