1946 (2) TMI 9

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....has been taxed on the footing that the family was "resident" and "ordinarily resident" in British India. In each case the income taxed was of the "previous year" which was the Tamil year Pramathi ending 12th April 1940 for the Indian business and the financial year ending 31st March 1940 for the foreign business, the assessee's accounts in the two places having been made up to those dates respectively. There was no dispute that the family was "resident" in British India within the meaning of Section 4(1)(b ) read with Section 4-A of the Indian Income-tax Act, 1922, as amended by the Income-tax (Amendment) Act, VII of 1939, The assessee, however, contended that the family was "not ordinarily resident" in British India within the meaning ....

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.... 31st December 1938 preceding the year of account whether of the Ceylon or the Indian business, (ii) that he was in British India for 731 days on the aggregate during the seven Tamil years preceding Pramathi, the year of account of the Indian business, and (iii) that he was in British India for 731 days on the aggregate during the seven t financial years preceding the financial year 1939-40 which was the year of account of the Ceylon business. It will thus be seen that if the "seven years" mentioned in clause (a) be taken as seven calendar years, the manager cannot be said to have been in British India during that period for more than two years, and the assessee's joint family would be entitled, under the second proviso to Section 4(1) ....

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....revious year" may be either the financial year next preceding or, at the option of the assessee, any other period of twelve months ending within such year if he has made up his accounts for such period. It was held that an assessee could not have two separate "previous years" for the purpose of income-tax ( Commissioner of Income-tax, Bombay v. Abubaker Abdul Rahman [1936] 4 ITR 233; ILR 60 Bom 679) but this view was superseded by the amending Act and it is now possible for an assessee to have a different "previous year" for each separate source of income [Section 2(11)]. "Total income" is the total amount of income, profits and gains referred to in sub-section (1) of Section 4 computed in the manner laid down in the Act [Section 2(15)]. Se....

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....lt in a gap, an interregnum, before the commencement of the "previous year" except, of course, where that year also began from the 1st of January. Such a result is repugnant to the intendment of the provisions of Section 4-B (a) read with Section 4(1) under which the terminus ad quern is the commencement of the "previous year". We find nothing in Section 50 of the Act to which reference was made in the course of the argument to support the interpretation contended for on behalf of the assessee. It was said that if the "seven years" mentioned in Section 4-B (a) were taken as referring to the period immediately preceding the year of account, it would give rise to the anomalous position of one and the same person being liable to assesiment ....