COMMISSIONER OF INCOME-TAX Vs. KRISHNAGOPAL MAHESHWARI

JUDGEMENT

(1.) Krishngopal Maheshwari, the assessee, is a Karta of the Hindu undivided family. As a representative of the family he was a shareholder at the relevant time in Sutlej Cotton Mills Limited (hereinafter referred to as the mills) which had its registered office at Amritsar. But the factory of the Mills was situate at Okara in West Pakistan. The assessee received certain dividends from the Mills and the question arose in connection with the inclusion of the dividends from the Mills in the total assessment of the assessee. The controversy in the present case related to the assessment year 1953-54, for which the relevant previous year was Maru Year 2008-09, ending October 17, 1952. Initially the Income-tax Officer completed the assessment for the year 1953-54 on June 9, 1953 on a total income of Rs. 1,19,918/-. This amount included the sum of Rs. 19,010/- which was taken to be dividends arising in Pakistan. In the order it is stated "Pakistan income is to be taken for rate proposes only".

(2.) The assessment for this year was reopened u/s 34(1)(b) of the Income-tax Act, 1922, on the ground that the assessee's income had been subject of excessive relief. The revised assessment was completed on a total income of Rs. 1,19,918/-. The full dividends including the amount of Rs. 19,010/- received from the Mills were made chargeable to tax in India, and the tax was demanded accordingly. The Income-tax Officer rejected the contention of the assessee that action u/s 34(1)(b) was not in order in the circumstances of the case.

(3.) The assessee thereafter appealed to the AAC and raised the same objection as was raised before the Income-tax Officer. He overruled the objection by his order dated October 8, 1964, relying upon the order passed by him in the case of Madangopal Maheshwari on the same day.