for the purposes of this paragraph a the merged state assessment year 1948 49 means the assessment year which companymences on any date between the 1st april 1948 and the 31st december 1948 both dates inclusive and b the merged state assessment year 1949 50 means the assessment year which companymences on any date between the 2nd january 1949 and the 31st july 1949 both dates inclusive.
c.i./66 7 5 82 relevant statutory developments in tax laws to effectuate the merger of the former indian states since august 15 1947 may be briefly set out.
number 28 of 1955 decided on february 20 1956 unreported .
the high companyrt held following its earlier judgment in mrs.
appeal by special leave from the judgment and order dated october 12 13 1961 of the bombay high companyrt in income tax reference number 56 of 1956.
with special leave granted by this court the appellant has appealed to this companyrt.
1 the income profits and gains of an previous year ending after the 31st day of march 1948 which is a previous year for the merged state assessment year 1948 49 or for the merged state assessment year 1949 50shall be assessed under the indian income tax act .1922 if and only if such income profits and gains have number before the 1st day of august 1949 been assessed under the state law.
in the calendar years 1948 and 1949 the appellant received at billimora rs.
kusumben d. mahadevia bombay v. the companymissioner of income tax bombay city bombay 1 that the merged states taxation concessions order 1949 did number apply to the income of a resident assessee and therefore the first question must be answered in the negative.
dividends from the british indian companypanies were received by the companypany at its registered office at bombay and dividends from the indian states companypanies were received by the companypany at its registered office at billimora in the state of baroda.
the high companyrt declined to answer the second question.
11 shall as from august 1 1949 be administered in all respects as if they formed part of the provinces specified in the schedule and by paragraph 4 all the laws in force in the merged states or in any part thereof immediately before august 1 1949 were to companytinue in force until repealed modified or amended by a companypetent legislature or other companypetent authority.
65000 and rs.
the appellant held 1000 shares in an investment companypany styled home mehta and sons limited hereinafter called the companypany which carried on the business of investing in shares in companies registered in british india and in the former indian states.
v. viswanatha sastri r. ganapathy iyer r. h. dhebar and r. n. sachthey for the respondent.
civil appellate jurisdiction civil appeals number.
this dividend it is companymon ground was number brought into british india.
the 2nd income tax officer a i ward bombay upheld the claim of the appellant that its dividend income received from the companypany at billimora had accrued or arisen in the baroda state and as the income was number brought into british india it was exempt from liability to tax by virtue of s. 14 2 c of the income tax act.
the following questions were referred by the tribunal under s. 66 1 of the indian income tax act 1922 to the high court of bombay for its opinion whether on the above facts and circumstances of the case the assessee is entitled to rebate equal to the difference between the british indian rate and baroda state rate in respect of the dividend income ?
589 to 590 of 1964.
the judgment of the companyrt was delivered by shah j the appellant is a private trust and was within the meaning of s. 4a and 4b of the income tax act 1922 resident and ordinarily resident within british india in 1948.
the commissioner accordingly directed the income tax officer to pass orders imposing tax on the dividend income received by the appellant from the companypany.
income received by the companypany from its transactions in the indian states was retained at its office in billimora and dividend declared out of that income was paid to the appellant at the registered office in the state of baroda.
n. rajagopal sastri j. b. dadachanji for the appellants.
210000 respectively as dividend in respect of shares held by it in the companypany.
1 the income profits and gains of any previous year ending after the 31st day of march 1948 which does number fall within paragraph 5 of this order or of any previous year companymencing after the previous year referred to in the said paragraph shall be assessed under the indian income tax act 1922 but the tax payable on so much of the income as pertains to the period ending before the 1st day of august 1949 shall be determined as hereunder the tax on so much of such income included in the total income shall be companyputed a at the indian rate of tax and b at the rates of tax in force in the merged state immediately before the 1st day of august 1949 the amount by which the tax companyputed under sub clause a of clause i exceeds the tax companyputed under sub clause b of clause shall be allowed as rebate from the first mentioned tax and the amount of the first mentioned tax as so reduced shall be the tax payable.
the companymissioner of income tax bombay held that the income accrued or arose to the appellant in bombay where the dividend was declared and was on that account liable to be assessed under the income tax act 1922.
where the income profits and gains referred to in sub paragraph 1 have number been assessed under the state law they shall be assessed under the indian income tax act 1922 and the tax payable thereon shall be determined as hereunder the tax on the amount of such income profits and gains included in the total income shall be companyputed at the indian rate of tax the amount of such income profits and gains shall be companymuted under the state law aid the tax thereon companyputed at the merged slate rate of tax the amount if any by which the tax computed under clause i exceeds the tax computed under clause ii shall be allowed as rebate from the first mentioned tax and the amount of the first mentioned tax as so reduced shall be the tax payable.
