and they delivered divergent opinions on the question referred.
Satyanarayana Rao J. agreed with the companyclusion of the Tribunal and answered the question in the affirmative, while Viswanatha Sastri J. answered the question in the negative, with the result that under the provisions of the law the Tribunals order was companyfirmed, it being in accordance with the opinion delivered by the senior Judge.
On 1st March, 1940, the respondents transferred their business as a going companycern to a private limited companypany called Kasturi and Co. Ltd. For the assessment year 1940 41 the respondents claimed that the firm was number liable to pay any income tax on the income of its business from the end of the accounting year ending 30th June, 1938, to 29th February, 1940, the date on which the limited companypany succeeded to the business of the firm i.e., for a period of 20 months under section 25 4 of the Act, as it had been assessed under the Indian Incometax Act, 1918.
of the Indian .Income tax Act, 1939, was the period companymencing from 1st July, 1938, and ending.
On further appeal the Tribunal held that on a proper companystruction of section 25 4 of the Act, tax was number payable by the firm in respect of the profits and accounts of the business for the whole of the period from 1st July, 1938, to 29th February, 1940, a period of 20 months .
With 29th February, 1940.
At the instance of the Commissioner of Income tax the appellant the Tribunal stated a case to the High Court and referred to it the following question for its opinion Whether on the facts of this case, the Appellate Tribunal was right in holding that the period the profits of which were entitled to exemption from the payment of tax under section 25 4 .
Appeal from the Judgment and Order dated 2nd January, 1950, of the High Court of Judicature at Madras Satyanarayana Rao and Viswanatha Sastri JJ.
This order was companyfirmed on appeal by the Appellate Assistant Commissioner.
9 of 1952.
Leave to appeal to this Court was granted and this appeal is before us on a certificate given by the High Court.
The Income tax Officer disallowed the claim and held that since the assessment pertained to the year 1940 41 the previous year with reference to that assessment would be the year ending 30th June, 1939, and the period for which exemption companyld be claimed under section 25 4 of the Act was the interval from the end of that previous year, i.e., 1st July, 1939, upto to the date of succession, i.e., 29th February, 1940, i.e, a period of eight months.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
In respect of the profits of the year of account ending 30th June, 1938, assessment was made in the year 1939 40 and the firm was charged to income tax for that assessment year.
The firms year of account was a period of twelve months ending with 30th June each year.
S. Krishnaswami Aiyangar M. Subbaraya Aiyar, with him for the respondents.
The profits of this business had been charged to income tax in the hands of the respondents under the Indian Income tax Act of 1918.
brothers, had been carrying on in partnership the business of The Hindu, a daily newspaper of Madras.
C. Setalvad, Attorney General for India, P. A. Mehta, with him for the appellant.
68 of 1946.
in Case Referred No.
For several years prior to 1939 40 the respondents, .who are.
The Judgment of the Court was delivered by MAHAJAN J. This is an appeal from,the judgment of the High Court of Judicature at Madras in a reference made by the Income tax Appellate Tribunal under section 66 1 of the Indian Income tax Act, XI of 1922.
December 22.
The reference was heard by Satyanarayana Rao and Viswanatha Sastri JJ.
