COMMISSIONER OF INCOME-TAX Vs. BANSILAL ABIRCHAND

JUDGEMENT

(1.) THIS is a reference by the Commissioner of Income-tax under Section 66, Income-tax Act, the non-applicant being the firm of Messrs. Bansilal Abirchand, R.B. Bankers, the managing proprietor of which is Rai Bahadur Sir Bisesardas Daga.

(2.) THE non-applicant has been assessed to income-tax for the year 1925-26. His income tax in certain respects has been assessed on the profits of the previous year. The non-applicant firm owns branches both in and outside the Province and indulges in various kinds of business, besides that of banking proper. The firm owns considerable property at various places and shares in a number of permanent partnerships and the like.

(3.) THE first three questions mentioned above admittedly stand or fall together, the same principle being involved in connexion with the question of whether or not these losses could be properly claimed by the non-applicant in the year under assessment. In para. 2 of the Assistant Commissioner's report of the 15th February 1928 a fair enough description is given of the method adopted by the non-applicant in connexion with the items we have mentioned above. In the case of stock jobbing business and the like, it has apparently been the practice of the non-applicant to adopt a somewhat special method of keeping accounts. There are two such obvious methods; one to spread the profits or losses over the whole term of years in which trans actions occurred or to take final losses or gains at; the end of the period when the transactions completely cease.