Incomplete consideration of connected tax records can vitiate a remittance finding and require rehearing.

A finding on the source of remittances in tax assessment was legally unsustainable because the Tribunal did not properly consider material from the corresponding income-tax proceedings already on record. The record showed that the remittance figures for the same accounting period were before the Tribunal, including material indicating that part of the remittances related to earlier-period profits. The High Court was therefore not justified in affirming the answers against the assessee. The matter had to be reheard by the Tribunal after full consideration of the relevant material, and the High Court's answers were set aside.

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Issues: Whether the finding recorded by the Tribunal on the source of remittances from the Indian States to British India was sustainable in law and whether the matter required rehearing on the basis of the material already on record.

Analysis: The remittance figures dealt with in the income-tax assessment proceedings for the same accounting period were before the Tribunal when the business profits tax assessment was made. The Tribunal proceeded on the footing that there was no material to show that the remittances were out of profits made prior to the accounting period, although the case stated itself recorded the treatment of part of the remittance as relating to profits of an earlier period. The High Court was therefore not justified in affirming the answers against the assessee. The finding was vitiated because the relevant material from the corresponding income-tax proceedings had not been properly considered.

Conclusion: The finding was defective in law and the matter had to be reheard by the Tribunal after considering the relevant material on record.

Final Conclusion: The High Court's answers were set aside and the appeal succeeded to the extent that the controversy was remitted for fresh decision by the Tribunal.

Ratio Decidendi: A finding on taxability based on incomplete consideration of relevant material from connected assessment proceedings is legally defective and cannot sustain the judicial answer on reference.

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