COMMISSIONER OF INCOME-TAX Vs. CHUNILAL BMEHTA

JUDGEMENT

(1.) This is a reference made by the Commissioner of Income-tax under Section 66 (2) of the Indian Income-tax Act, 1922, and it raises a question of considerable importance, and not, I think, easy to answer.

(2.) The facts out of which the question arises are not in dispute. The assessee carries on business in Bombay as a broker in cotton, silver and other commodities, and he also as a regular business enters into contracts on his own behalf for the sale and purchase of such commodities with persons in British India and also with persons outside British India, particularly in New York and Liverpool; which are the places with which we have to deal on this reference,, During the year of assessment, which is the year terminating on March 31, 1934, the assessee made a profit of Rs, 11,54,830 from the business of buying and selling commodities outside British India, and the question is whether he r is liable to be assessed in respect of this sum.

(3.) The actual questions raised by the Commissioner are :- (1) Whether in the circumstances of the case all the profits and gains which accrued and arose to the assessee from the business of future delivery contracts entered into with parties outside British India in which no delivery was ever taken or given or any part of such profits and gains can be said to have accrued or arisen in British India ; and (2) Whether as regards that part of the said business of future delivery contracts in which delivery had been actually taken or given outside British India, the profits or gains which accrued can be said to have accrued wholly or partly in British India.