COMMISSIONER OF INCOME TAX, MADRAS Vs. CTRMNNARAYANAN CHETTIAR

JUDGEMENT

(1.) This appeal refers to the assessment year 1939-40 and is in respect of an item of Rs. 21,153. The appellant claims that out of the total income of Rs. 28,396 assessed by the Income-tax Officer and confirmed by the Appellate Assistant Commissioner a sum of Rs. 21,153 should be deducted on the ground that this item is not income.

(2.) The facts are that the appellants father had a share in M. S. M. M. firm at Ipoh and Sithiwan. The firms property included certain lands known as Chengkat Meranti Estate at Sithiwan and Hill Rise Estate at Batukajah. The appellants father died in 1921 and on his death the partnership came to an end. It is said that a Panchayat was set up in 1928 which appears to have determined the amount to be paid to the appellant and his brother on account of their fathers share of capital, surplus capital and profits in the firm. The award is not available to us nor any proceedings of the said Panchayat. The Income-tax Officer however examined Mr. M. S. S. Chidambaram Chettiar one of the Panchayatdars in this award and found from him that a sum of 1,55,900 Panchayatdars in this award and found from him that a sum of $ 1,55,900 was awarded to be paid to the appellant and his brother. This sum thus arrived at in favour of the appellant and his brother was not paid to them on account of their minority till the year 1938, when all of them became majors. Another Panchayat again went into the question and in addition to the original sum a further sum of $ 27,294 was awarded by way of interest. It is not agreed between the parties that this sum was awarded as interest and we shall have to consider this question a little later.

(3.) The partner thereafter gave a hundi on the 2 April, 1938 on his poh shop for a sum of $ 1,82,900 and a deed of release was executed by he appellant, his brother, and their adoptive mother in favour of M. S. M. M. Firm. The hundi was sent to Ipoh for collection and it was ashed on the 9 May, 1938, and a further sum of $ 294 in interest from the date of the hundi to the date of encashment was also realised. The total amount of interest realised was $ 27,294 and the half share of he appellant came to $ 13,647 equivalent to Rs. 21,153 which is the sum in dispute before us.