SooperKanoon Citation | sooperkanoon.com/346302 |
Subject | Direct Taxation |
Court | Mumbai |
Decided On | Sep-11-1934 |
Case Number | Civil Reference No. 6 of 1934 |
Reported in | AIR1935Bom197; [1935]3ITR459(Bom) |
Appellant | Commissioner of Income Tax, Bombay |
Respondent | C. Macdonald and Co. |
The only distinction suggested by Mr. Coltman is that in that case the amount to be paid away was a proportion of the net profits whereas, here it is a proportion of the income. But whether the obligation to pay is based on the gross income or on the net profits cannot in my view affect the question. I think therefore that the case is really covered by that decision. But Mr. Coltman, in support of his contention that the sum paid to third parties is not part of the income of the assessees, has relied on a decision of the Privy Council, Raja Bejoy Singh Dudhuria v. Commissioner of Income-tax. In that case the assessee was in receipt of income from immovable property, and that property and the income therefrom were subject to charge for maintenance in favour of the assessees step-mother, and it was held by the Privy Council that the sums paid to the step-mother in respect of this charge never constituted part of the income, or what the Privy Council call, the real income, of the Raja liable to assessment under Act. I am not sure that I follow very clearly the distinction which the Privy Council found between the two cases, the Pondicherry case and Rajas case, but the facts of the present case are clearly much closer to the facts in the Pondicherry case than to those in the Rajas case, because in the Rajs case there was a charge on the property, whereas in the present case as in the Pondicherry case, there is no charge, there is only a convenient to pay. It seems to me therefore that it is the Pondicherry case which governs the case before us, and we must follow that case. The questions therefore will be answered, No. 1 in the affirmative and No. 2 in the negative. Costs to be paid by the assessees on the original side scale to be taxed by the Taxing Master.
RANGNEKAR, J. - I agree and have nothing to add.