CHIDAMBARAM CHETTIAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred to us by the Commissioner of Income-tax is : In what year was the remittance of Rs. 50,000 (Rupees Fifty thousand) received ?

(2.) THE assessee is a Nattukottai Chetti doing business in Burma, Klang, Kualalumpur, Penang etc. On 3rd April 1929, a sum of Rs. 50,000 was debited to his account in his Klang books as having been paid on that date to S. A. Rm. Penang, a money-lending business owned by another Nattukottai Chetti. THE entry does not say in what connection this amount was paid. But it is admitted that it relates to the purchase of house sites by the petitioner. He was negotiating for the purchase of certain house sites adjoining his house at Kanadukathan which belonged to S. A. Rm. An agreement to sell land was entered into between the petitioner and S. A. Rm. on 5th April 1929. THE sale deed was executed on a later date, on 8th May 1929. THE payment of Rs. 50,000 made on 3rd April 1929 was, it may be mentioned, not shown in the accounts of the petitioner as remittance to him in that year. If that was so shown, we may take it that the Income-tax authorities would have assessed him for that amount for the year 1929-1930. On those facts, it was contended by the petitioner that he cannot be taxed under S. 4 (2) of the Income-tax Act for that sum of Rs. 50,000 on the ground that he has received that amount during the accounting period, his case being that he could be considered to have received that amount only on 3rd April, 1929, and no at a later date. Of course, there is no transfer of money in this case, it being understood that the profits were received in the shape of two house-sites. THE Income-tax authorities decided that the profits could be said to have been received only on 8th May 1929, when the sale deed was executed and not earlier.

(3.) IN the circumstances, we hold that the money was received during the accounting period, 13th April 1929 to 12th April 1930 and the petitioner is liable to pay income-tax on that amount for the year 1930-31. The reference is answered accordingly. The Commissioner will be entitled to get his costs Rs. 250 from the assessee.