1971 (9) TMI 5

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....ucceeded to this business on the death of her husband on or about February 17, 1960. It would appear that M/s. Mohanlal Hargovindas had recovered a certain amount towards that M/s. Mohanlal Hargovindas had recovered a certain amount towards that M/s. Mohanlal Hargovinds had recovered a certain amount towards sales tax from the assessee's husband relating to the period January 26,1950, to March 31,1951. In an appeal filed by the said firm, however, the Assistant Commissioner of Sales Tax remitted the sum of Rs. 24,341 so recovered by the firm by an order dated November 31, 1960. Consequently, M/s. Mohanlal Hargovindas refunded that amount to the assessee by means of a draft dated October 31, 1961. This draft was received by the assessee on N....

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.... in respect of such trading liability by way of remission or cessation thereof, the amount obtained by him or the value of benefit accruing to him, shall be deemed to be profits and gains of business or profession and accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not." As pointed out by the High Court, under the general law if a trading liability has been allowed as a business expenditure and if this liability is remitted in any subsequent year, the amount remitted cannot be taxed as income of the year of the remission nor can the account for the year in which the liability was allowe....

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....rovides that where a person dies his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died in the like manner and to the same extent as the deceased. The corresponding provision in the Income-tax Act, 1922, was section 24B. In Commissioner of Income-tax v. Amarchand N. Shroff it was laid down by this court that section 24B did not authorise the levy of tax on receipts by the legal representative of a deceased person in the year of assessment succeeding the year of account being the previous year in which such person died. The assessee had ordinarily to be a living person and could not be a dead person. By section 24B the legal personality of the deceased assessee was extended....