COMMISSIONER OF INCOME TAX Vs. PESTONJI HORMUSJI CONTRACTOR

JUDGEMENT

(1.) THIS reference arises out of the assessment made upon the assessee for the asst. year 1951 -52 and the question which has to be considered is whether the assessee was entitled to the concession under the Part "B" States (Taxation Concessions) Order, 1950, in respect of the sum of Rs. 14,319 and Rs. 28,097, which were included in the computation of his total income. The assessee, who has been assessed in the status of an individual, derived income from his personal business as well as partnership business in Rajpipla, which is a merged territory and also in several Part "B" States, such as Rajasthan, Saurashtra and Madhya Bharat. One of such partnership business, which the assessee was carrying on, was as a partner in the registered firm of Pestonji Hormusji & Sons, carrying on business at Bhawani Mandi in the erstwhile Jhalawar State, which became part of Rajasthan, a Part " B" State. Another such business was as a partner in the registered firm of Nasserwanji Pestonji & Co., carrying on business at Jamnagar in Saurashtra.

(2.) THE Department has taken out a notice of motion praying that the Tribunal should be directed to refer some more questions of law to this Court. The notice of motion also prays for the reframing of the question, which the Tribunal has referred to this Court. The notice of motion in so far as it relates to further questions of law is clearly beyond time and cannot be entertained, and in so far as the other prayer contained in it is concerned no notice of motion is necessary for the purpose of reframing the question because if we find that the question as framed does not bring out the real question in dispute or the controversy between the parties, we have ample jurisdiction to reframe the question so as to have the real question necessary to be decided being considered by us. The notice of motion has also not been pressed by the Department and we, therefore, do not make any order on the notice of motion.

(3.) MR . Kaka for the assessee has argued that it is not necessary to reframe the question because the question properly reflects what has been argued by the Department before the Tribunal. Mr. Kaka says that the only ground on which the Department contended that these items were liable to be taxed at the full Indian rate was that they fell within the ambit of S. 4(1)(b)(iii) and that contention was negatived by the Tribunal on the authority of Shankar Gumdel vs. CIT (supra), which directly applied to that contention. According to Mr. Kaka it was not contended by the Department that even if the items did not fall under S. 4(1)(b)(iii), the assessee would still not be entitled to the benefit of the Concessions Order because his case did not fall within the scope of the concession as contained in paragraph 4 of the Order. There was no dispute, says Mr. Kaka, that of the assessee came within the scope of the concession. The only contention of the Department was that paragraph 6 of the Concessions Order did not apply because the income, which had accrued or arisen in the Part B State, had been remitted to the taxable territories within the meaning of S. 4 (1)(b)(iii). We are not inclined to agree with the submission of Mr. Kaka and, in our opinion, the question has got to be reframed. The contention of the Department before the Tribunal was that, although the two sums represented income that had accrued or arisen to the assessee in the Part B State, they had not remained there during the account year, but had been remitted to the taxable territories. It is no doubt true that in examining this contention the provisions of S. 4(1)(b)(iii) have been considered but that does not mean that the Department's contention was that these items fell under S. 4(1)(b)(iii). The contention of the department whether these two items were liable to be taxed at the full Indian rate or at the concessional rate has got to be considered with reference to the relevant provisions of the IT Act and the Taxation Concessions Order. What has got to be considered is whether the assessee was entitled to the concession as claimed by him in respect of these two items under the Concessions Order. The proper form, therefore, in which the question for consideration could be framed is as under :