DUGGAN COL SIR J N Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference raises a very interesting and important question as to the validity of Act XXII of 1947.

(2.) THE assessee before us are Sir Jamshedji Duggan and Lady Duggan, and the question arises with regard to a certain sum of Rs. 2,40,863 included in Sir Jamshedji's return of income for the assessment year 1947-48. This sum is the profit which Sir Jamshedji made as a result of the sale of certain shares and securities. Lady Duggan likewise, in her return of income for the same assessment year, included as "capital gains" two sums of Rs, 3,54,168 and Rs. 27,682 arising from the sale of share and securities. THE Income-tax Officer included these capital gains in the assessable incomes of the husband and wife under Section 12B of the Indian Income-tax Act. THE contention raised by the assessees was that Section 12B of the Indian Income-tax Act was ultra vires of the Central Legislature. This contention was overruled by the Tribunal and the assessees have now come before us on a reference made to us under Section 66(1) of the Indian Income-tax Act.

(3.) THEREFORE, all that Sir John Beaumont did was merely to notice an argument advanced by the Advocate General, and, further, to express the opinion that the argument was not wholly untenable. Mr. Justice Broomfield stated (p. 683) :-