ANNAMALAI MINOR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred to this Court under Section 66 (1) of the Income-tax Act, "Whether the payment of Malayan Estate Duty of Rs. 3,29,746 is a proper deduction out of the earlier unassessed profits of the assessee from 1-4-1933", arose out of the assessment proceedings for the year 1949-50, the corresponding previous year having ended on 12-4-1949.

(2.) THE headquarters of the business which the assessee's family carried on was at Paganeri in Ramanathapuram district, and it had branches in Burma and Singapore among other places. THE accepted basis for assessing the Hindu undivided family, of which the assessee Annamalai was a member, was that it was resident and ordinarily resident. In the year of account that ended on 12-4-1949 the assessee received as remittances from abroad a total sum of Rs. 1,25,238 of which Rs. 1,25,034 came from Singapore and the balance of Rs. 204 from Burma. Rs. 80,652 represented the profits that had accrued to the assessee at Singapore in the year of account.

(3.) THE basis for any presumption should be, as the learned Advocate General urged, the normal course of conduct of a prudent man of business. He would rather meet any call for expenditure out of his Income than deplete his capital, if the amount of the unexpended income still available to him is sufficient to meet that expenditure, and if there was no other factor to be considered.