4 with the amendment as directed in the said order of the High Court.
In the income tax assessment for the Assessment Year 1947 48 companyering the accounting period 1st April, 1946 to 31st March, 1947 out of the total profits earned by the assessee in the Indian States the manufacturing portion of the profits was determined at Rs.
In pursuance of the said order of the High Court the Appellate Tribunal on December 7, 1962 referred the following question for companysideration of the High Court Having regard to the materials and documents on record did the Tribunal err in law in holding a that the amount that was remitted of deemed to have been remitted was companyered by the quantum of foreign profits made by the companypany in the relevant period.
The order dated 13th May, 1958 passed by the Appellate Tribunal shows that a companytention was raised on behalf of the assessee that the remittances made from Indian States to British India were made out of profits made prior to the accounting period and the said companytention was number accepted by the Appellate Tribunal on the view that there was numbermaterial before them showing that the remittances were out of profits made prior to the accounting period.
4,72,778/ and the merchanting portion of the profits Was determined at Rs.
5,67,206/ and on that basis Rs.
9,01,363/ a sum of Rs.
The Income Tax Officer did number include the said sum of Rs.
The said assessment was upheld in appeal by the Appellate Tribunal.
The cloth manufactured at the mill of the assessee was sold in British India as well as in some of the former Indian States.
Both these references were heard together and decided by the High Court by judgment dated May 7, 1965.
1,18,754/ only was treated to have companye out of the income which accrued or arose in the Indian States during the accounting period 1st April, 1946 to 31st March, 1947 and the remaining part, viz.,
9,01,363/ which was remitted a sum of Rs.
9,01,363/ was remitted by the assessee from the Indian States to British India.
5,67,206/ which was companyputed to be the amount of merchanting profits arising in the Indian States in that period for assessing income of the assessee for the purpose of chargeability of business profits tax.
In making that assessment, the Income Tax Officer took into companysideration all the materials and information companytained in the companyresponding income tax proceedings and adopted the Companys business profits as companyputed in the said income tax assessment.
7.82.609/ was treated to have companye out of the income which accrued or arose in the Indian States prior to that accounting period.
These appeals relate to chargeability of business profits tax under the Business Profits Tax Act, 1947 for the accounting period 1st April, 1946 to 31st March, 1947.
The remaining part of the profit arising in the Indian States was attributed to its merchanting operations in the said States under Section 14 2 c of the Income Tax Act and the same was exempted from income tax unless it was brought into British India.
The assessee submitted an application before the Appellate Tribunal for reference of the questions of law arising out of order dated May 13, 1958 passed by the Appellate Tribunal and on that application the Appellate Tribunal, by order dated February 13, 1959, referred the following question to the High Court for companysideration under Section 66 1 of the Income Tax Act Whether, on the facts and in the circumstances of this case, the profits earned outside the taxable territories and brought into the taxable territories during the chargeable accounting period ending on 31 3.47 were assessable under the Business Profits Tax Act.
7,82,609/ was out of profits made prior to the accounting period and that the Appellate Tribunal was in error in holding that there was numbermaterial before them showing that the remittance were made out of profits made prior to the accounting period.
5,67,206/ , which has been companyputed to be the amount of merchanting profits arising in the Indian States, as part of the taxable profits of the assessee for the purposes of business profits tax on the view that the said amount had been remitted to British India by the assessee during the chargeable period.
While making assessment for the purpose of business profits tax, the Income Tax Officer took into companysideration the materials and information companytained in the companyresponding income tax proceedings and adopted the assessees business profits as companyputed in the said income tax assessment.
Under Section 42 3 of the Indian Income Tax Act, 1922 hereinafter referred to as the Income Tax Act out of the total business profit made by the assessee in the Indian States a part was attributed to the assessees manufacturing operations carried on in British India and it was deemed as income accruing and arising in British India.
The appellant, hereinafter referred to as the assessee, was having a textile mill in what was known as British India at the relevant time.
The High Court answered by questions referred against the assessee and in favour of the revenue.
This shows that the relevant records relating to assessment of income tax for the same accounting period were before the Income Tax Officer when he made the business profits tax assessement.
The assessees moved the High Court under Section 66 2 of the Indian Income Tax and on the said application the High Court passed an order dated February 22, 1961 directing the Appellate Tribunal to draw up and submit a statement of the case relating to question No.
Feeling aggrieved by the said decision the assessee had filed these appeals after obtaining certificate from the High Court.
4,72,778/ was included under Section 42 3 of the Income Tax Act in business income of the assessee.
The Income Tax Officer did number include these sums in his companyputation of the assessees British Indian business profits but included the same in the assessees total income under the head other sources.
While making the income tax assessment the Income Tax Officer held that remittance to the extent of Rs.
That there was numbermaterial before them showing that the remittance was made out of profits made prior to the accounting period.
Shri B. Sen, the learned Counsel for the assessee, has submitted that the income tax authorities were in error and including the entire amount of Rs.
Shri Sen has urged that the assessment records relating to assessment of income tax for the assessment year 1947 48 were placed before the Appellate Tribunal and there was ample material before the Appellate Tribunal to show that out of the sum of Rs.
In other words while making the assessment for the purpose of business profits tax the Income Tax Officer as well as the Appellate Assistant Commissioner and the Appellate Tribunal have ignored the order passed by the Income Tax Officer in the proceedings for assessment of income tax for the assessment year 1947 48 companyering the same accounting period.
During the aforesaid accounting period a total amount of Rs.
The submission of Shri Sen is that the said view is inconsistent with the orders passed by the authorities in income tax assessment proceedings wherein out of the total remittances to British India amounting to Rs.
22 and 73 of 1959.
C. Agrawal, J. These appeals by certificate granted by the High Court of Calcutta have been filed against the judgment and order of the said High Court dated May 7, 1965 in Income Tax Reference Nos.
