COMMISSIONER OF INCOME TAX Vs. BANK OF CHETTINAD LIMITED

JUDGEMENT

(1.) -

(2.) THIS reference arises out of the assessment to income-tax and super tax for the year 1933-34 of the Bank of Chettinad Ltd., a company registered under the Indian Companies Act as the agent of the Chettinad Bank Limited company registered in the Native State of Pudukotta. I will refer hereafter to the Bank of Chettinad Limited as the Kanadukathan Bank and to the Chettinad Bank Limited as the Pudukotta Bank as the Commissioner of Income-tax has done in his statement of the case. The assessment proceeded on the basis that profits had accrued to the Pudukotta Bank from business connection in British India within the meaning of Section 42 (1) of the Indian Income-tax Act. In order to appreciate the position it is necessary to state how the two banks came into existence and what their course of business is.