K V A L M RAMANATHAN CHETTIAR Vs. COMMISSIONER OF INCOME TAX MADRAS

JUDGEMENT

(1.) THE Judgments of the court were delivered by

(2.) THESE are appeals by certificate from a common judgment of the Madras High Court rendered in three references under S. 66(1) of the Income Tax Act, 1922 (hereinafter called the 'Act') pertaining to assessment years 1953-54, 1954-55 and 1955-56. In the reference relating to the first assessment year three questions in respect of the last two, two questions were referred by the tribunal. The three questions relating to the first reference are :

(3.) THE Income Tax Officer allowed double taxation relief on a sum of Rs. 1,92,816 by adding income from other sources to the foreign income and deducting from the total thus computed the loss of Rs. 68,858.00. THE Commissioner in exercise of his powers under S. 48, read with S. 49-D however held that that computation was wrong because according to him the business loss of Rs. 68,858.00 incurred by the assessee can be set off only against the business profits of Rs. 2,22,532.00 earned in Malaya resulting in a business income of Rs. 1,53,674.00 being the only income from Malaya which can be considered to have suffered double taxation. In appeal against the order of the Commissioner, the tribunal following the judgment in C. I. T., Madras v. Arunachalam Chtttiar came to the conclusion that the expression "such doubly taxed income" can only indicate that it is that portion of the income on which tax in fact has been imposed and paid by the assessee that qualifies for double income relief. THE High court also was of the view that the relief granted by S. 49-D on such doubly taxed income has reference to the factual double incidence under two different jurisdictions of tax on identical amount of income, that is to say, an identical income on which two taxes have been imposed under the Indian jurisdiction and the other by a foreign authority.