HARIDWAR DUBEY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 66(1) of the Indian Income-tax Act, 1922, hereinafter referred to as "the Act", The material facts are as follows : The assessee, who is the applicant in the case, went to Thailand in 1913 and was employed there as watchman on a salary of Rs. 25 per mensem. He gave up that job and started a timber business in 1936 and set up a saw mill in 1937. Following the invasion of Thailand by the Japanese in World War II the applicant and his wife were arrested as enemy nationals in 1941, but were released after detention for sixteen days. The appellant thereafter continued to carry on his timber business up to the year 1943. Subsequently, however, restrictions were imposed regarding the booking of railway wagons for transporting timber and the applicant had to close down his business and sell away the assets and stock-in-trade for nominal amounts in 1943. The applicant was again arrested in 1944 but he was released after a period of 120 days. He returned to India in June, 1948.

(2.) THE assessee had claimed compensation from the Government of Thailand as follows : <FRM>JUDGEMENT_704_ITR75_1970Html1.htm</FRM>

(3.) THE Income-tax Officer allowed a deduction of ten per cent. for legal charges and held that the balance amounting to 6,958, equivalent to Rs. 92,873, was taxable under Sections 4(1)(b)(iii) of the Act.