COMMISSIONER OF INCOME-TAX, C P AND BERAR Vs. S M CHITNAVIS

JUDGEMENT

(1.) This is an appeal from a judgment of the Court of the Judicial Commissioner, Central Provinces, upon a reference of questions of law, made at the instance of an assessee, under S. 66 (2), Income-tax Act 1922, which will hereafter be referred to as the Act. The questions involved were considered by the said Court to be of such importance that the case was (after argument before two Commissioners) re argued before a Full Bench.

(2.) Two separate and distinct matters were raised for decision before the said Court, and its adjudication upon each was adverse to the present appellant. In respect of one of such matters he made no attempt to appeal, and the dispute in regard thereto is at an end. In regard to the other matter however he applied to the said Court for leave to appeal to His Majesty in Council, and in response to that application the Court certified that the requirements of S. 109 (c), Civil PC 1908, were fulfilled, "inasmuch as a question of great public importance is involved in the case." Their Lordships draw attention to this aspect of the case at the outset in view of the contentions which were advanced before them on behalf of the respondent. The facts of the case may now be stated.

(3.) Sir Shankar Rao Chitnavis (who will be referred to as the assessee) for the purpose of assessment to income-tax for the year 1926-1927 had, under S. 22 of the Act, to make a return of his total income during the year 1925-1926. He returned that income at Rs. 74,668. The Income-tax Officer, proceeding under S. 23 of the Act, by his order dated 17 January 1927, assessed the total income at a figure of Rs. 1,16,480. In arriving at this figure the officer had (inter alia) disallowed certain deductions which had been made by the assessee. The assessee appealed, under S. 30 of the Act, against the assessment to the Assistant Commissioner, who, by his order dated 25 April 1927, reduced the amount of the assessment to Rs. 1,13,012. The Assistant Commissioner allowed some, but disallowed others, of the said deductions.