V.S.DESAI, J. - (1.) THIS reference arises out of the assessment made upon the assessee for the asst. year 1951 -52 and the question which has to be considered is whether the assessee was entitled to the concession under the Part "B" States (Taxation Concessions) Order, 1950, in respect of the sum of Rs. 14,319 and Rs. 28,097, which were included in the computation of his total income. The assessee, who has been assessed in the status of an individual, derived income from his personal business as well as partnership business in Rajpipla, which is a merged territory and also in several Part "B" States, such as Rajasthan, Saurashtra and Madhya Bharat. One of such partnership business, which the assessee was carrying on, was as a partner in the registered firm of Pestonji Hormusji & Sons, carrying on business at Bhawani Mandi in the erstwhile Jhalawar State, which became part of Rajasthan, a Part " B" State. Another such business was as a partner in the registered firm of Nasserwanji Pestonji & Co., carrying on business at Jamnagar in Saurashtra. The previous year for the source of the assessee's income from the business of Bhawani Mandi was the financial year ending on 31st March, 1951, while for the business at Jamnagar in Saurashtra, the previous year was the year ending on the 31st of August, 1950. In the assessment of the assessee for the asst. yr. 1951 -52, the ITO included a sum of Rs. 26,590 as the assessee's income from the Bhawani Mandi business and Rs. 75,525 as the income from the business in Jamnagar in Saurashtra. Out of the sum of Rs. 26,590, which was included as the income from the Bhawani Mandi source, a sum of Rs. 14,319 was taken as remittance of the income, profit and gains of the current year and the balance of Rs. 12,271 as remittances out of the past accumulated profits. Similarly, in respect of the sum of Rs. 75,525 included as income from the Jamnagar source, a sum of Rs. 28,097 was treated as remittances of the profits of the current year, while the remaining amount of Rs. 47,428 as remittances of past profits. In the present reference we are concerned with the sum of Rs. 14,319 from the Bhawani Mandi business and Rs. 28,097 from the Jamnagar business. In respect of these items, the assessee claimed that he was entitled to the benefit of the Part "B" States (Taxation Concessions) Order, 1950. The claim, however, was disallowed by the ITO, who brought these two sums to tax at the full Indian rate in spite of the concessional rate prescribed by the said Taxation Concessions Order, 1950, on the ground that although the two sums represented income that had accrued or arisen to the assessee in the Part "B" States, the said income has not remained in the Part "B" State but had been during the accounting year remitted to the taxable territories and, therefore, was not entitled to concession. Now, it appears that in the previous assessment year, i.e., in the asst. year 1950 -51, similar items had been claimed by the assessee as entitled to the benefit of the Taxation Concessions Order. The said claims were disallowed by the Departmental authorities but the Tribunal in the second appeal had sustained the said claims, relying on the authority of the decision of this Court in Shankar Gumdel vs. CIT (1956) 29 ITR 806 (Bom). When the assessee appealed to the AAC against the present assessment order for the asst. yr. 1951 -52, the AAC, following the Tribunal's decision for the previous assessment year, allowed the appeal and held that the assessee was entitled to the concession as claimed by him. The Department went in appeal to the Tribunal. It was urged in that appeal on behalf of the Department that the sums of Rs. 14,319 and Rs. 28,097, which represented the assessee's share of profits in certain firms in the Part "B" States, were liable to be taxed at the full Indian rate and not at the concessional rate as provided by the Part "B" States (Taxation Concessions) Order, 1950. It was also contended that there were sufficient profits available at any rate at Jamnagar for being remitted within the meaning of S. 4(1)(b)(iii) to the taxable territories other than Saurashtra State so that so far as the remittance from Jamnagar was concerned, the entire amount could have been regarded as remittances of past profits within the meaning of S. 4(1)(b)(iii). The Tribunal negatived both these contentions and upheld the order passed by the AAC. According to the Tribunal, the amounts of Rs. 14,319 and Rs. 28,097 could not be treated as remittances of profits or gains because at the point of time when they were remitted, they could not be said to have been profits or gains of the assessee. The profits, which could be considered as assessable on the ground of their being remitted to the taxable territories are those which come within the provisions of S. 4(1)(b)(iii) and the sums remitted could not fall within that provision by reason of the decision of this Court in Shankar Gumdel vs. CIT (supra). According to the Tribunal, these items could only be brought to tax on the ground that they had accrued to the assessee, who was a resident in the taxable territories and, therefore, in respect of them the substantive part of paragraph 6 of the Part "B" States (Taxation Concessions) Order, 1950, applied and the assessee was entitled to the concession under the said paragraph. With regard to the other contentions raised on behalf of the Department, the Tribunal agreed with the conclusion arrived at by the AAC that there were no accumulated profits of the past years out of which the amount of Rs. 28,097 could be taken to have been remitted. It accordingly rejected the said contention of the Department and dismissed the Department's appeal. An application under S. 66(1) of the Indian INCOME TAX ACT, 1922, was made by the Department requesting the Tribunal to refer questions of law, which arose out of its order relating to both the contentions, which has been raised by the Department before the Tribunal. The Tribunal was of the view that the question of law relating to the first contention of the Department arose out of its order, which could be referred to the High Court, while no question of law arose as regards the second contention. It accordingly allowed the Department's prayer to refer the question of law relating to the first contention and rejected its prayer with regard to the question concerning the second contention and drew up a statement of the case and referred the following question to this Court : "Whether the sums of Rs. 14,319 and Rs. 28,097 representing the income that accrued or arose to the assessee in Part B States during the previous year relevant to the asst. year 1951 -52 are caught by the provisions of S. 4(1)(b)(iii) r/w Explanation 4 to S. 4(1) of the IT Act ?"
(2.) THE Department has taken out a notice of motion praying that the Tribunal should be directed to refer some more questions of law to this Court. The notice of motion also prays for the reframing of the question, which the Tribunal has referred to this Court. The notice of motion in so far as it relates to further questions of law is clearly beyond time and cannot be entertained, and in so far as the other prayer contained in it is concerned no notice of motion is necessary for the purpose of reframing the question because if we find that the question as framed does not bring out the real question in dispute or the controversy between the parties, we have ample jurisdiction to reframe the question so as to have the real question necessary to be decided being considered by us. The notice of motion has also not been pressed by the Department and we, therefore, do not make any order on the notice of motion. Before proceeding to consider the question, which has been referred to us, we think it will be necessary to reframe it because the real question involved in the case has not been brought out by the question as framed by the Tribunal.
(3.) MR . Kaka for the assessee has argued that it is not necessary to reframe the question because the question properly reflects what has been argued by the Department before the Tribunal. Mr. Kaka says that the only ground on which the Department contended that these items were liable to be taxed at the full Indian rate was that they fell within the ambit of S. 4(1)(b)(iii) and that contention was negatived by the Tribunal on the authority of Shankar Gumdel vs. CIT (supra), which directly applied to that contention. According to Mr. Kaka it was not contended by the Department that even if the items did not fall under S. 4(1)(b)(iii), the assessee would still not be entitled to the benefit of the Concessions Order because his case did not fall within the scope of the concession as contained in paragraph 4 of the Order. There was no dispute, says Mr. Kaka, that of the assessee came within the scope of the concession. The only contention of the Department was that paragraph 6 of the Concessions Order did not apply because the income, which had accrued or arisen in the Part B State, had been remitted to the taxable territories within the meaning of S. 4 (1)(b)(iii). We are not inclined to agree with the submission of Mr. Kaka and, in our opinion, the question has got to be reframed. The contention of the Department before the Tribunal was that, although the two sums represented income that had accrued or arisen to the assessee in the Part B State, they had not remained there during the account year, but had been remitted to the taxable territories. It is no doubt true that in examining this contention the provisions of S. 4(1)(b)(iii) have been considered but that does not mean that the Department's contention was that these items fell under S. 4(1)(b)(iii). The contention of the department whether these two items were liable to be taxed at the full Indian rate or at the concessional rate has got to be considered with reference to the relevant provisions of the IT Act and the Taxation Concessions Order. What has got to be considered is whether the assessee was entitled to the concession as claimed by him in respect of these two items under the Concessions Order. The proper form, therefore, in which the question for consideration could be framed is as under : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled to rebate in respect of the sums of Rs. 14,319 and Rs. 28,097 under the Part B States (Taxation Concessions) Order." ;