CHINNATHAMBI ROWTHER AND CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assesses is a partnership firm consisting of four partners. THE firm commenced its business on July 21, 1959, and it was formed for the specific purpose of selling a particular quantity of cinder, purchased from the South Indian Railways, on June 21, 1959, in the name of one of the partners, Chinnathambi Rowther, for Rs. 85,600. Each of the partners advanced a sum of Rs. 22,500 as capital. THE books of the firm were closed for the period from July 21, 1959, to March 31, 1963, and the net income was determined at Rs. 27,972. THE assessee itself filed a return admitting the said amount of Rs. 27,972 as the income for the assessment year 1963-64. THE Income-tax Officer completed the assessment accepting the return filed by the assessee.

(2.) THE assessee, however, filed an appeal before the Appellate Assistant Commissioner challenging the assessment on the ground that the sum of Rs. 27,972 should be taken as the income for the period of 3 years and 8 months pertaining to the assessment years 1960-61 to 1963-64 and that, therefore, the said income of Rs. 27,972 returned by the assessee should be apportioned pro rata for all the said assessment years. THE Appellate Assistant Commissioner rejected the appeal, holding that the firm was constituted solely for the purpose of carrying on the solitary venture of the sale of cinder and that, therefore, the case attracted the principle in K.H. Mody, In re, [1940] 8 ITR 179 (Bom)..

(3.) THEREFORE, on the peculiar circumstances of this case, we are inclined to agree with the view taken by the Tribunal that the income of Rs. 27,972 arose only in the assessment year 1963-64. We answer the reference accordingly. The revenue will have its costs. Counsel's fee, Rs. 250.