Appeal from the judgment and order dated December 17, 18, 1958, of the Bombay High Court in Income tax Reference No.
At the instance of the Commissioner, the Tribunal referred under s. 66 1 of the Act a question, which when reframed by the High Court of Bombay read as follows Whether the assessee is entitled to the benefit of s. 25 3 in respect of the interest on securities?
4,13,992/ as interest on securities held by it.
In 1947 it received Rs.
685 686 of 1963.
A. Palkhivala, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
N. Rajagopala Sastri and R. N. Sachthey, for the appellant.
The Judgment of the Court was delivered by SHAH M S. Chugandas and Co a firm dealing in securities received in the year 1946 Rs.
The order of the Income tax Officer was companyfirmed in appeal by the Appellate Assistant Commissioner.
The Income tax Officer held that the interest earned by the firm on securities being liable to be assessed to tax under s. 8 and number under s. 10 of the Income tax Act, the firm was number entitled to the benefit of the exemption claimed.
On June 30, 1947 the firm discontinued its business.
1,01,229/ as interest from the same source.
The firm also applied to substitute the income earned in the year 1947 for the income of the previous year.
Securities held by the assessee were its stock in trade and interest on those securities was received from time to time, and this interest had for companyputing the taxable income to be taken into account under s. 8 of the Indian Income tax Act, 1922.
27/X of 1954.
July 29, 1964.
In proceedings for assessment for 1947 48 and 1948 49 the firm, relying upon s. 25 3 of the Indian Income tax Act, 1922, claimed exemption from payment of tax on income earned in the relevant previous year, on the plea that the firm was carrying on business before the Indian Income tax Act, 1922, was enacted, and on that business, tax had been charged under the provisions of the Indian Incometax Act 7 of 1918 in respect of the business done immediately before that Act was repealed.
It is companymon ground that the principal business of the assessee was as a dealer in securities.
