COMMISSIONER OF INCOME-TAX, MADRAS Vs. SPSSUBRAMANIA CHETTIAR

JUDGEMENT

(1.) This is a reference at the instance of the Commissioner of Income-tax by the Income-tax Appellate Tribunal, . Madras under Section 66 (1) of the Indian Income-tax Act. The assessee Mr. S. P. S. Subramania Chettiar, derived income form outside British India, with which income this reference is solely concerned.

(2.) The assessment year is 1941-42 and the year of account is 1940-41. During that year of account the assessees accrued foreign income was derived from four sources and aggregated Rs. 44,079 in respect which he remitted Rs. 24,978 into British India; with regard to one of those sources, the accrued income was Rs. 3,350 but the assessee remitted Rs. 4,750; the excess of Rs. 1,400 was accrued income derived from the same source during an earlier accounting year. Including the sum of Rs. 1,400. The total remittance into British India was a sum of Rs. 26,378 during the relevant year. The Income-tax Officer included in the assessment the above sum of Rs. 1,400 as unassessed profits of previous years. The assessee contended that sum should not have been separately and additionally assessed and the assessment should be reduced accordingly. On appeal by the assessee, the Appellate Assistant Commissioner agreed with the assessees contention and upon appeal by the Commissioner, the Tribunal upheld the decision of the Appellate Assistant Commissioner. Learned counsel for the Commissioner and the assessee agreed that the question referred by the Tribunal did not correctly raise what is required to be answered by this Court, upon the facts of the case, and the question was restated with agreement of counsel. It now reads :- "Whether the sum of Rs. 1,400 assessed under Section 4(1) (b) (iii) of the Income-tax Act in this case, can be included in the amount brought into British India within the meaning of the third proviso to Section 4(1) and for the purpose of calculating the excess of the accrued income that should not be included in the assessment of the income of that year."

(3.) Before taking this course we referred to two cases before the Judicial Committee, Commissioner of Income-tax, Bombay V/s. Sarangpur Cotton Manufacturing Co., Ltd., and Commissioner of Income-tax, Bengal V/s. Shaw Wallace & Co. . The assessees contention arises out of the provisions of sub- section (1), clause (b), and the third proviso of Section 4 of the Income-tax Act which so far as material, provides as follows :- "4. (1).... the total income of any previous year of any person includes all income, profits and gains from whatever sources derived which........ (b) if such person is resident in British India during such year, (ii) accrue or arise to him without British India during such year, or (iii) having accrued or arisen to him without British India before the beginning of such year..... are brought into or received in British India by him during such year............................. Provided further that if any year the amount of income accruing or arising without British India exceeds the amount brought into British India in that year, there shall not be included in the assessment of the income of that year so much of such excess as does not exceed four thousand five hundred rupees."