IN RE: ASSESSMENT OF BEHARI LAL MULLICK Vs. STATE

JUDGEMENT

(1.) This is a Reference made under Section 66 of the Indian Income Tax Act of 1922 by the Commissioner of Income Tax, Bengal. Two questions are referred to us and I will take them separately. The first question is as follows: Is an assessment for a year valid in law when the source of income is non-existent in that particular year? Is not Section 3 itself a bar to making an assessment in such a case? Is not the phrase of which he is the owner in Section 9 a bar to making an assessment in the case of house property?

(2.) The assessment in the course of which this question of law arises was the assessment made upon one Behari Lal Mullick for the income-tax year 1924-25. The assessee was owner of a house property and land owner living apparently an 8 Durpa Narain Tagore Street in Calcutta - a dwelling house in which he had a one-third share. The "previous year" with which we have to deal is 1923-24 and the assessee in his "statement of total income during the previous year" declared the amount of profits or gains or income during the previous year as having accrued to him from two sources numbered respectively 4 and 9 in the form provided by Rule No. 19 of the Rules made by the Board of Inland Revenue under Section 59 of the Act. In respect of "property" as shown in detail in Schedule A, he declared the income to have been Rs. 3,116. Two items of property are included in this : (a) certain house property at 191, Harrison Road, which was let out to tenants and for which in 1923-24 the assessee actually received as rent Rs. 3,900 : and (b) the dwelling-house in Durpa Narain Tagore Street, the annual letting value being put down as Rs. 1,724. These two items when certain deductions have been made account for the figure Rs. 3,116. The source No. 9 in the form was declared to have yielded in 1923-24 an income of Rs. 8,306. This was ground-rent received by the assessee for certain bustee lands at 14 Mechuabazar Street, let out to tenants.

(3.) The claim made by the assessee was that the house property at Harrison Road and the bustee land at Mechuabazar Street had been mortgaged by him and that although in the "previous year," i.e., 1923-24, he had derived income therefrom as aforesaid he had in the year of assessment, i.e., 1924-25, received co income therefrom in fact by reason that a mortgage suit had been brought against him and the properties were sold on the 16 of August 1924. He claimed accordingly that in 1924-25 he had no source of income and was not liable to be assessed for the income-tax year 1924-25.