Rebuttable presumption on foreign remittances: taxable profit depends on facts, and no question of law arose.

A remittance received from a foreign business is not conclusively presumed to be profit; any inference that it represents taxable income is only a rebuttable presumption of fact, dependent on the surrounding circumstances and the explanation offered by the assessee. Where the remittances on both sides were nearly equal, the Tribunal was entitled to decline to treat the amount as profit remitted to British India. On those facts, the matter remained one of fact and did not give rise to any referable question of law. The reference was answered against the Revenue and in favour of the assessee.

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Issues: Whether remittances received by an assessee in British India from a foreign business can be presumed, in the absence of explanation, to represent profits so as to be taxable, and whether the facts of the case gave rise to any question of law.

Analysis: The presumption that remittances from a foreign business are out of profits is not a presumption of law but a presumption of fact. Its application depends on the surrounding circumstances, including the relative extent of remittances on both sides and the explanation, if any, offered by the assessee. The Court treated Sections 106 and 114 of the Indian Evidence Act as supporting the possibility of such a factual presumption, but held that the strength of the presumption varies from case to case and may be weak or inapplicable where the facts do not justify it. On the facts found by the Tribunal, the remittances on both sides were nearly equal and the Tribunal was entitled to decline to treat the sum in question as profit remitted to British India. The Court also held that the issue remained one of fact and no referable question of law arose from the Tribunal's order.

Conclusion: The remittances could not be treated as conclusively shown to be taxable profits on the facts of this case, and the reference was answered against the Revenue and in favour of the assessee.

Final Conclusion: The Court upheld the Tribunal's factual determination, held that the matter did not raise any question of law, and declined to interfere with the assessment conclusion sought by the Department.

Ratio Decidendi: A remittance received from a foreign business may give rise to only a rebuttable presumption that it represents profit, and whether that presumption arises or is displaced is ordinarily a question of fact depending on the circumstances of each case.

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