MOOSA S. MADHA & AZAM S. MADHA vs. COMMISSIONER OF INCOME-TAX, WEST BENGAL, CALCUTTA

CIVIL APPEAL No. 491/1970Supreme Court[1973] 3 S.C.R. 49706 February 1973Bench: 3 JudgesAuthor: K.S. HEGDE, P. JAGANMOHAN REDDY, HANS RAJ KHANNA B6 pages
AI SummaryDismissed

What were the facts?

The assessee, Moosa S. Madha & Azam S. Madha, is appealing a decision concerning assessment year 1948-49. The Income-Tax Officer (ITO) determined the assessee was 'resident but not ordinarily resident' in India. A sum of Rs. 2 lakhs remitted from Burma to India was also held to be part of the assessee's accrued profits. The Appellate Assistant Commissioner and the Tribunal confirmed these findings. The High Court answered two questions of law in favour of the Revenue. The assessee had migrated to Burma in 1901 and carried on business there. He returned to India in 1942, stayed until 1946, and returned to Burma in February 1946. A sum of Rs. 2 lakhs was transferred from Burma to India on October 26, 1947, and credited to the assessee's account. The assessee later filed a voluntary disclosure petition and returns, leading to proceedings under Section 34(1)(a) for assessment years 1947-48 and 1948-49.

What did the Supreme Court hold?

The Tribunal held that the assessee was 'resident' but 'not ordinarily resident' in India for the assessment year 1948-49. It also held that the Rs. 2 lakhs remitted from Burma to India formed part of the assessee's accrued profits. The Supreme Court upheld these findings. Regarding the first issue, the Court affirmed that the burden of proving the visit to India in 1947 was occasional or casual lay on the assessee. The assessee's affidavit was insufficient, and the mere fact of having no business in India did not discharge this onus. The Court found no evidence to support the assessee's claim that his visit was casual or occasional. Concerning the second issue, the Court found that the assessee failed to prove the Rs. 2 lakhs was not business income, having not produced his account books despite opportunities. The complaint about the Tribunal ignoring photostat copies was not raised in the Section 66(1) application, and the High Court was justified in not considering them. The remittance was therefore not proved to be a capital asset. The appeal was dismissed.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, there was any material or evidence for the Tribunal to hold that the assessee was a resident but not ordinarily resident in the taxable territories for the assessment year 1948-49? (Question of law) 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amount of Rs. 2 lakhs had been remitted to the taxable territories by the assessee during the accounting year out of his accrued profits of earlier years? (Question of law) Assessee's contentions: - The assessee argued that the Tribunal came to an erroneous conclusion regarding his residential status, as his visit to India in 1947 was occasional and casual. The fact that he had no business in India during his two-month stay should have been considered. (Relied on the principle that the burden of proof for casual/occasional visits lies on the assessee, but contended it was not discharged by the Revenue). - The assessee also contended that certified photostat copies of his accounts were produced before the Tribunal, and the Tribunal erred in not considering these documents. Revenue's contentions: - The Revenue contended that the assessee failed to discharge the burden of proving his visit to India in 1947 was occasional or casual. His affidavit merely stated a two-month visit without specifying the reason or its casual nature. - The Revenue argued that the assessee failed to prove that the Rs. 2 lakhs remitted did not represent his business income, despite opportunities to produce account books. The High Court was justified in not considering the photostat copies as the issue was not raised under Section 66(1) and the statement of case did not refer to them.

Which sections of the Income-tax Act were involved?

Section 4A(a)(iii),Section 66(1),Section 34(i)(a)

AI-generated summary — verify with the full judgment below

A B c D E F G H 497 MOOSA S. MADHA & AZAM S. MADHA v. COMMISSIONER OF INCOME-TAX, WEST BENGAL, CALCUTTA Febuary 6, 1973 [K. S. HEGOE, P. ]AGANMOHAN REOOY AND H. R. KHANNA, JJ.J Income-tax A.ct, 1922, •· 4A(a)(iil)-A.ssessee held to be 'resident' but 'not ordinarily resident'-Burd,en of proving that his visit to India in relevant period war occasional and cG:Sual war on assessee-Burden not discha1·gecl by mere assertion that he had no business in India-Question whethe~ ren1lttance of Jnco1ne was from accrued profits/Burden Of provJ'ng that it was not from accrued profits-was on assessee-Quertion tlint TrihuMl did not consider photos/at copies of aceounts produced before rt not raised in application under s. 66(1 )-High Court rightly refused to take such copies into account.

In respect of the assessment year I948-49 the Income-tax Officer'• finding that the assessee was 'resident but not ordinarily resident' in that year in India was confirmed by the Appellate A'!Sistant Commissioner and the Tribunal. It was also held that a sum of Rs. 2 lakhs remitted by the assessee to India from Burma during the relevant period fornied part of the assessee's accrue

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 66(1)

All 184 judgments and leading authorities on Section 66(1) →

Recent GST High Court judgments

Search GST case law →