P C LAL CHAUDHURY Vs. STATE OF BIHAR

JUDGEMENT

(1.) Pursuant to an order of the High Court dated 8th August 1949 the Board of Revenue has made this reference under Section 28(3) of the Bihar Agricultural Income-tax Act.

(2.) The material facts are that for the year 1946-47 the assesses Raja P. C. La'1 Chaudhry claimed a deduction of Rs. 63,500 paid on 24th July 1946 towards his mortgage debt due to Ku-mar P. N. Ray of Calcutta. It was alleged by the assessee that the amount was paid towards interest on the mortgage debt. It appears that on a subsequent date there was a compromise decree prepared in the High Court of Calcutta, according to which the decretal amount was fixed at Rs. 10,50,227. The Agricultural Income-tax department did not concede the whole claim of the assessee but calculated the tax on the ground that half the amount, viz., Rs. 31,750 should be deducted on account of payment towards interest. An appeal was preferred by the assessee before the Commissioner of Bhagalpore Division who dismissed the appeal & upheld the order of the Assistant Commissioner on the ground that there was no specific apportionment of the payment towards interest either by the creditor or by the debtor and there was no mention in the compromise decree that this amount had been appropriated towards interest. Against the order of the Commissioner the assessee moved the Board of Revenue who held that the matter called for further enquiry but since there was negligence on the part of the assessee to produce the relevant books of account, further enquiry would be made only if the assessee made payment of Rs. 200 towards the cost of the department.

(3.) At the instance of the assessee the High Court had ordered the Board of Revenue to make statement of the case upon the following question of law , viz., "whether the Board was justified in law in ordering a remand for further findings in the circumstances?"