MUNICIPAL COMMITTEE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS order will dispose of Income -tax References Nos. 54 and 55 of 1962. They arise out of two separate assessment orders for the years 1946 -47 and 1947 -48. The question of law that arise in both these references is the same and, therefore, will be answered in this single order which will dispose of both the references.

(2.) THE Income -tax Appellate Tribunal, Delhi Bench, has referred the following question of law for our opinion under section 66(1) of the Indian Income -tax Act (hereinafter referred to as the Act :

(3.) THUS the total world income for purposes of rate was determined at Rs. 11,82,862. An appeal was taken against this order under section 31 of the Act to the Appellate Assistant Commissioner. Contentions were raised before the Appellate Assistant Commissioner with regard to depreciation on electricity, water plant, Sanjauli octroi post collections and income from forests, but without any success. With regard to the question of determination of total world income, it was contended that while determining the world income outside Koti State at Rs. 11,47,407, the Income -tax Officer had failed to consider the losses under the heads 'education, medical relief, public health, etc.', on the ground that these were of a charitable nature, the income from which would be exempt from tax under section 4(iii), The total expenses, capital expenses and receipts with regard to education, medical relief and public health, etc. were worked as follow :