COMMISSIONER OF INCOME TAX Vs. INDERMANI JATIA SMT

JUDGEMENT

(1.) THIS is a reference by the Appellate Tribunal, at the instance of the Commissioner of Income-tax, Lucknow, under Section 66(1) of the Indian Income-tax Act, 1922, (hereinafter referred to as "the Act"). The statement of the case relates to the assessment year 1945-46. The relevant previous year ended on October 15, 1944.

(2.) THE material facts are these. THE late Ganga Sagar Jatia carried on business of cotton ginning and commission agency in cotton and he had also income from property and dividends. He was an assessee under the Income-tax Act of 1918 (Act VII of 1918). He died on September 22, 1944, leaving behind him his widow, Smt. Indermani Jatia, but no issues. Smt. Indermani succeeded to the assets left by her deceased husband and the businesses and she continued to carry on the same.

(3.) SMT. Indermani then filed an appeal before the Appellate Assistant Commissioner against the order of the Income-tax Officer. It was contended on her behalf that the Income-tax Officer should have allowed relief not only with regard to the income from business assessed under Section 10 but also with regard to the income from property and shares which were held as assets of the business. The Appellate Assistant Commissioner was of the view that the shares and properties held by the assessee were not, in reality, the assets of the business or vocation carried on by him. He agreed with the Income-tax Officer that relief under Section 25(4) could not be allowed in respect of dividend income of Rs. 3,51,529 and property income of Rs. 27,268 nor with regard to the sum of Rs. 90,000 which had been assessed as the the assessee's income from "other sources". He confirmed the order of the Income-tax Officer allowing the assessee relief under Section 25(4) in respect only of the business income of Rs. 31,762 which had been assessed under Section 10 of the Act.