Subba Rao, J. - (1.) This appeal by special leave is directed against the judgment of the High Court of Judicature at Bombay in Income-tax Reference No. 27 of 1959.
(2.) The assessee, B. R. Iranee, the proprietor of Messrs. C. M. Karranjia & Co., was carrying on business of export and import in Hong Kong. In March, 1941, he started a similar business in Bombay. He came to Bombay on June 29,1941, from Hong Kong leaving an employee to look after his business there. During the year ending with December 31, 1946, he was a resident but not ordinarily resident of India within the meaning of the provisions of the Income Tax Act. He was controlling the affairs of the Hong Kong business from Bombay during that year. But during the course of that year he went to Hong Kong on June 9, 1946, and returned to Bombay in September, 1946. For the assessment year business at Rs. 1,00,000, included the same in his assessment and assessed income-tax thereon. The assessee contended that the profits of the Hong Kong business from India and that, in any event, the losses suffered by him in respect of the Hong Kong business in 1941 should be set off against the said profits. The Income-tax Officer, by his order dated March 28, 1952, rejected the contentions of the assessee. On appeal, the Appellate Assistant Commissioner agreed with him. On a further appeal, the Income-tax Appellate Tribunal came to the same conclusion. At the instance of the legal representative of the assessee, the Tribunal, by its order dated March 6, 1959, referred the following question of law to the High Court : "Whether, on the facts and in the circumstances of the case the income of the assessee from the Hong Kong branch should be apportioned either on a time basis or in any other manner for the purpose of inclusion of the total income of the assessee."
(3.) Further, at the instance of the assessee, the High Court directed the Tribunal to refer the following question : "Whether, on the facts and in the circumstances of the case, the Tribunal erred in law or misdirected itself in rejecting the assessees claim to set off the alleged losses of 1941 of Hong Kong business against the income of the assessment year." ;