SATYA PAUL VIRMANI Vs. COMMR OF INCOME-TAX PUNJAB PEPSU AND HIMACHAL PRADESH
HIGH COURT OF PUNJAB AND HARYANA
SATYA PAUL VIRMANI
COMMR OF INCOME-TAX PUNJAB PEPSU AND HIMACHAL PRADESH
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(1.) THIS is a case stated by the Income-tax Appellate Tribunal, Delhi, on 15-2-1952, where the following question has been referred for determination by this Court:
"whether in view of the apportionment made by the Income-tax Officer under Section 23 (5) (a)of the income of the registered firm of Messrs. Dhanpat Mal Jawala Dass, Amritsar, arriving at rs. 56,985/- as the applicant's 13 annas share in the firm's net income of Rs. 70,136/-, it was not open to the Income-tax authorities in assessing the applicant as an individual to compute (for the purposes of the Indo-Pakistan Agreement) the applicant's income from the Flour Mills business of Amritsar by taking it separately at Rs. 75,549/- being 13 annas share of Rs. 92,984/-?"
(2.) THE assessee during the relevant period was a partner of firm Dhanpat Mal Jawala Dass, with its principal place of business at Amritsar, having a thirteen-anna share and Bodh Raj, the other partner. Had a three-anna share. The firm Dhan pat Mal Jawala Dass before the partition of the country carried on business both in India as weil as in what is now Pakistan and was a register ed firm. For the assessment year 1946-47 the assessment of this firm was completed on 28-8-1948. The total income of the firm was computed at Rs. 92,984/- and to this had to be added Excess profit Tax refund of Rs. 4,261/ -. This firm incur red a loss of Rs. 27,109/- in respect of the business carried on at Vihari (now in Pakistan ). Thus their net income for the purposes of assessment comes to Rs. 70,136/ -. Acting under Section 23 (5) (a), Income-tax Act, the income-tax Officer apportioned this income as follows: name of Partner Profit seth Satya Pal -/13/- 56,985/-L. Bodh Raj -/3/- 13,151/-----------70,136/-
(3.) WHAT the Income-tax Officer did after this was to split up the loss incurred in Pakistan and holding that the share of the loss of the assessee was Rs. 18,564/-, he computed the net income assessable of the assessee on the profits of firm Dhan-pat Mal Jawala Dass to be Rs. 56,985/-plus Rs. 18,564/- making it a total of Rs. 75,549/ -. The assessee has complained about this addition of Rs. 18,564/-, which he submits cannot be added and assessed to his other income. The Tribunal has by its order dated 8-1-1951, held against the assessee and on an application being made by the assessee has referred the question which I have given above for the determination of this Court.;
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