After the Constitution came into force, the present definition of taxable territories was incorporated in the Income Tax Act by the Finance Act, 1950 and the areas in which the assessee was carrying on the businesses with which we are companycerned in this appeal were included therein.
Hence this, appeal.
In the returns submitted by the assessee, prior to the assessment year 1950 51, it had proceeded on the basis that its account year ended on Diwali day but for the assessment year 1950 51, in respect of its income accrued from its businesses in Madhya Bharat, it chose the financial year ending on March 31, 1950 as the previous year.
basis that the previous year in respect of the companycerned source,,, ended on Diwali of 1949.
The Income Tax Officer as well as the Appellate Assistant Commissioner rejected the claim of the assessee that it companyld make such a choice.
that accrued or received in Madhya Bharat.
That decision was affirmed by the Appellate Assistant Commissioner but the Income Tax Appellate.
The Income Tax Officer assessed the assessee on the.
19 of 1969.
Appeal from the judgment and order dated October 28, 1960 of the Madhya Pradesh High Court in Misc.
T. Desai, S. K. Aiyar and B. D. Sharma, for the appellant.
C. Chagla, Rameshwar Nath, Mahinder Narain and Swaranjit Sodhi, for the respondents.
For the purpose of its accounts the assessee was.
adopting the year ending on Diwali day.
Prior to the assessment year 1950 51, the assessedwas assessed under the Indian Income Tax Act, 1922 in the status of a numberresident Hindu Undivided Family.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
Thereafter a reference was made to the High Court of Madhya Pradesh under s. 66 1 of the Act at the instance of the Commissioner of Income Tax but the High Court agreed with the view taken by the tribunal.
291 of 1958.
the Income Tax Officer and the Appellate Assistant Commissioner and agreed with the stand taken by the assessee.
This question under S. 66 1 of the Act was answered in favour of the assessee by the High Court of Madhya Pradesh.
Civil Case No.
The Judgment of the Court was delivered by Hedge, J. In this appeal by certificate the question that arises for decision is whether under the circumstances of the case having regard to Section 2 I I i a of the Income Tax Act, 1922 to be hereinafter referred to as the Act , the assessee is entitled to take the year ended on 31 3 1950 as the previous year relevant to the assessment year 1950 51 in respect of his sources of income arising outside the taxable territories.
Tribunal reversed the finding of.
The assessee the respondent is a Hindu Undivided Family with its Head office at Indore and branches at several places.
The income which accrued to or was received by the assessee in the former Indian States was number subject to tax under the Act but was taken into companysideration in companyputing its world income for the purpose of determining the rate.
Aggrieved by that decision, the Commissioner of Income Tax, Madhya Pradesh has brought this appeal.
It derives income from property, business in companyton and oil seeds, speculation, dividends, managing agency companymissions, etc.
The result of the amendment was that for the assessment year 1950 51, the assessee who was a resident of Madhya Bharat, was deemed to be a resident in the taxable territories during the previous year and hence liable to be taxed in respect of its income.
