GHANSHYAMDAS GANGADHAR Vs. COMMR OF INCOME TAX

JUDGEMENT

(1.) In pursuance of an order of this Court dated 3-5-1951, the Appellate Income-tax Tribunal has stated a case in which the question of law which arises for consideration is

(2.) The case arises out of excess profits tax assessment for the chargeable accounting period 1-8-1944 to 9-4-1946. The assessee is a Hindu undivided family which carried on business in piece goods. This business was closed on 31-3-1944, as held by this Court in an earlier proceeding. On this discontinuance of the business the family's assets came to Rs. 2,25,190/-. Out of this amount the assessee deposited a sum of Rs. 1,54,376/- in various banks on interest. Later he withdrew a certain amount for the purchase of colliery shares and still later he withdrew certain ether sums of money in order to make advances from time to time on interest to three persons Dindayal Parmanand of Banaras, Ramkumar Kishorelal of Ranchi and Mohan Lal Pursottamdas of Calcutta. During the chargeable accounting period the assessee received interest from these various sources amounting to a sum of Rs. 13,123/-. Income from, the interest in question was assessed under the Indian Income-tax Act under the head "other sources"; but the appellate Assistant Commissioner allowed relief to the assessee in regard to earned income farom the interest in question. In response to a notice under the Excess Profits Tax Act the assessee also filed a return for the chargeable accounting period 4-7-1944 to 3-7-1945. He stated in the return that his business had been closed on 31-7-1944, and that he was doing no business at all. Thereafter, he filed a revised return on 28-9-1946, for the chargeable accounting period 1-8-1944 to 9-4-1946 showing the income derived from the interest in question as profits from business and requested that the previous return submitted by him should be cancelled as having been filed under some misconception of law and facts. The Excess Profits-Tax Officer refused to entertain the revised return because he has already passed orders on the basis of the previous one. But on appeal the Commissioner directed a fresh assessment after accecting the return filed by the asses-see. As it has already been stated, in this return he showed a profit on account of business to the tune of Rs. 13,123/- which was the profit derived by him from interest on monies advanced to the various persons mentioned above.

(3.) The Income-tax officer found that the asses-see had not carried on any business during the chargeable "accounting period mentioned in the re-turn, and the Appellate Assistant Commissioner affirmed his order on appeal. The Tribunal also came to the same conclusion and overruled the contention of the assessee that the income derived by him was on account of any business carried on by the assessee so as to entitle him to any reduction under the Excess Profits Tax Act.