- (1.) This is a reference under Section 66(3) of the Income-tax Act (XI of 1922), by the Commissioner of Income-tax stating a case and the following questions of law for determination of this Court.
(2.) The assessee Govind ram Tansukh Rai carries on business at Ujhanj in Budaun District in British India and at Sambhar in the Jodhpur State. This business is carried on under different names and at Sambhar it is carried on under two names, viz., Sri Narain Har Bilas and Govind Ram Tansukh Rai. For the assessment year 1934-35 and for the accounting period Sambat 1989-90 corresponding to November, 1932, to October, 1933, the assessee originally was taxed on a total income of Rs. 16,272; subsequently supplementary assessment proceedings were started by the Income-tax Officer of Budaun under Section 34 of the Act with a view to assess certain income which had escaped assessment and a fresh assessment was made by him on a total income Rs. 29,906. This figure included a sum of Rs. 12,405 found to be the profits of the two businesses mentioned above carried on outside British India by the assessee and remitted to British India during the accounting year within the meaning of Section 4 (2) of the Income-tax Act. Against this assessment an appeal was made but the Assistant Commissioner maintained the assessment and on a combined application by the assessee under Sections 33 and 66 (2) of the Act, the Commissioner modified the assessment by holding that the profits received in British India were only Rs. 8,895 but he declined to state the case or any questions of law for the consideration of this Court. On the application of the assessee under Section 66(3) this Court directed the Commissioner to state the case and to refer the following questions to this Court :- (1) Whether the income, profits and gains of Sambat 1989-90 equivalent to 1933-34, can be presumed to have been brought into British India in that year (2) On whom does the onus lie when a question arises as to whether a particular sum of money remitted into British India represents capital or profits (3) In the circumstances did the sum of Rs. 12,405 represent profits or capital
(3.) The profit and loss of the assessee at its foreign business at Sambhar has been determined by the Department and its statement is as follows :- Profits or loss accruing or arising of;