The respondent who is the assessee owned an estate of 590 acres in South Malabar district, now in Kerala State. Out of that area 85 acres were covered by pepper, arecanut, paddy and coconut cultivation while the rest, i.e., 505 acres, had rubber plantations upon it. Of that area 235 acres were occupied by immature non-bearing rubber trees and 270 acres had mature rubber trees. The assessment relates to the year 1955-56, the accounting year being the year ending March 31, 1955. The respondent claimed from out of the income expenses relating to the maintenance and upkeep of immature non-bearing rubber trees. The Agricultural Income-tax Tribunal held that the expenses incurred on the whole area under rubber plantations were deductible expenses and remanded the case for ascertaining the expenses incurred in forking and manuring of the " non-bearing and immature " rubber grown areas also.
" Whether under the Travancore-Cochin Agricultural Income-tax Act, 1950, in calculating the assessable agricultural income of a rubber estate already planted and containing both mature yielding rubber trees and also immature rubber plants which have not come into bearing, the annual expenses incurred for the upkeep and maintenance of such rubber plants are not a permissible deduction, and, if so, whether the sum of I. Rs. 42,660-4-1 expended by the assessee in the relevant accounting year 1952 under this head may be deducted ? "And in the other two the question referred was :" Whether the expenses incurred for the maintenance and upkeep of immature rubber trees constitute a permissible deduction within the meaning of section 5(j) of Act XXII of 1950 ? "In all the references the questions were answered in the negative and against the appellant.
In July, 1940, the appellant had borrowed, though without interest, a large sum of money to the extent of about Rs. 10,00,000, no doubt, from his brother. He started a new account calling it No. 2 Investment Account. For the assessment years under appeal shares purchased and sold were of a large magnitude ranging from Rs. 4.68 lakhs to Rs. 69 thousands in what is called the First Account and from Rs. 9,64,000 or even if Port Trust debentures are excluded Rs. 3,60,000 to 30,000. The magnitude and the frequency and the ratio of sales to purchases and total holdings was evidence from which the Income-tax Appellate Tribunal could come to the conclusion as to the true nature of the activities of the appellant. The principle which is applicable to the present case is what we have said above and on the evidence which was before the Tribunal, i.e., the substantial nature of the transactions, the manner in which the books had been maintained, the magnitude of the shares purchased and sold and the ratio between the purchases and sales and the holdings, if on this material the Tribunal came to the conclusion that there was material to support the finding that the appellant was dealing in shares as a business, it could not be interfered with by the High Court and in our opinion it rightly answered the question against the appellant in the affirmative.
The respondent is a limited company which owns a spinning mill at Alwaye. It commenced business in January, 1951, and its first accounting year ended on December 31, 1951, and the relevant assessment year is 1952-53. It filed its return showing an income of Rs 3,21,284 without taking into account the amount allowable under section 15C of the Act. On February 2, 1953, the net assessable income of the respondent was determined at Rs 1,47,083 after deducting Rs 1,79,081 under section 15C.The respondent, however, declared a dividend of Rs 4,72,415 which attracted the application of section 2 of the Finance Act, 1952, read with Part B, proviso (ii), of the First Schedule and thus it became liable to the payment of additional income-tax and this fact was overlooked by the Income-tax Officer. After giving notice under section 35 of the Act, the Income-tax Officer by an order dated January 25, 1954, rectified this error and imposed an additional tax at the rate of one anna in the rupee. He later discovered that this was also erroneous and the rate should have been 5 annas in a rupee. By an order dated August 12, 1954, he rectified the error. Under section 18A advance income-tax had to be paid and the respondent company had deposited only Rs 5,000 and, therefore, became liable to penal interest under section 18A(8) of the Act. By the same order this omission to impose penal interest was corrected and this error was thus rectified.
Just as a partner in an unregistered firm which has suffered loss will not be allowed to set off his share of loss in the unregistered firm against his income from any other source, so it stands to reason that his loss from other sources cannot also be set off against his share income from an unregistered firm." The decision, of the Tribunal was not based upon any specific provision of the Income-tax Act but upon a parity of reasoning by which a specific provision about loss was held to apply the other way round also. The High Court correctly pointed out that all that section 14, sub-section (2), did was to save the profits of an unregistered firm from liability to tax in the hands of the partners. It did, not affect the computation of the total income to determine the rate applicable under section 3, in the light of section 16(1)(a). Indeed, section 16(1)(a) clearly provided that any sum exempt under section 14(2) was to be included in computing the total income of an assessee and, in view of this specific provision, the converse of the second proviso to section 24(1) which we have quoted above, hardly applied. To this extent, the order of the Tribunal was incorrect. The error was pointed out by the High Court, and the question thus raised was properly decided. We see no reason to differ from the High Court on this part of the case.
M/s. N. M. Rayaloo Iyer & Sons--hereinafter referred to as the assessees--are a firm carrying on business principally in dyes and chemicals. They are the chief representatives in " South India " of the products of the Imperial Chemical Industries Company (India) Ltd.--hereinafter referred to as the " I.C.I." The business in dyes and chemicals was in the years material to these appeals, conducted in the name and style of "Colours Trading Company", with its head office at Madura and in thirteen branch offices in different towns in " South India. " The business was carried on originally in partnership by three brothers, N. M. R. Venkatakrishna Iyer, N. M. R. Subbaraman and N. M. R. Krishnamurti. On April 13, 1946, N. M. R. Subbaraman retired from the firm and the share of N. M. R. Venkatakrishna Iyer was taken over by a private limited company, N. M. R. Venkatakrishna Iyer & Sons Ltd., but the business was, notwithstanding the changes in the personnel, continued in the original name and style. One N. M. R. Mahadevan (son of N. M. R. Venkatakrishna Iyer)--hereinafter referred to as Mahadevan--was employed by the assessees as the general manager of the Colours Trading Co. By letter dated April 17, 1940, the assessees wrote to Mahadevan agreeing to pay him remuneration at the rate of Rs. 1,800 per annum and 5% of the net profits of the concern (Colours Trading Company) calculated by deducting from the gross profits of the business, salaries, wages and other outgoings but without making any deduction for capital. By letter dated March 30, 1943, the salary of Mahadevan was fixed at Rs. 3,000 per annum and the commission was enhanced to 12 1/2% of the net profits of the Colours Trading Company.These appeals relate to the liability of the assessees to excess profits tax for the chargeable accounting periods ending April 13, 1943, April 12, 1944, April 2, 1945, and March 31, 1946, and for business profits tax for the chargeable accounting periods ending April 12, 1946, March 31, 1947, April 13, 1947, March 31, 1948, and April 12, 1948. The assessees claimed that they had paid to their employees in the years of account 1942-43 to 1947-48 under agreements executed from time to time a share in the special emergency commission received from the I.C.I., in addition to monthly salary, dearness allowance and general and special bonus. The I.C.I. in allowing the emergency commission by its letter dated January 24, 1944, recommended that 1% out of the 5% commission allowed may be " passed on " by the assessees to their " sub-distributors ". The assessees claimed that, pursuant to this recommendation, they paid to their employees commission at rates varying between 1 1/2% to 4%, and when the emergency commission was increased to 15% and the I.C.I. by letter dated February 23, 1945, recommended that 6% out of this commission may be passed on to the sub-distributors, the assessees claimed to have distributed commission at rates varying from 2% to 7 1/2% and in some cases at a rate as high as 12%. Observing that the assessees having no sub-distributors, the direction given by the I.C.I. did not require the assessees to " pass on " the commission to their employees, they concluded that the expenditure alleged to have been incurred was not reasonable and necessary within the meaning of rule 12, Schedule I of the Excess Profits Tax Act.The following table which is incorporated in the statement of case of the Tribunal sets out for the four years in question the emergency commission received by the assessees and the aggregate amount paid by them to their employees.
This is an appeal on a certificate of fitness granted by the High Court of Calcutta under section 66A(2) of the Indian Income-tax Act, 1922. The assessee, Provat Kumar Mitter, is the appellant. He was a registered holder of 500 ordinary shares of the Calcutta Agency Ltd. By a written instrument dated January 19, 1953, he assigned to his wife, Ena Mitter, the right, title and interest to all dividends and sums of money which might be declared or might become due on account or in respect of those shares for the term of her natural life. We may read here the material portion of the instrument." This Deed Witnesseth that for effecting the said desire and in consideration of the natural love and affection of the Settlor for the Beneficiary the Settlor as the beneficial owner assigns unto the Beneficiary the right, title and interest to every dividend and sum of money which may be declared or become due and payable on account of or in respect of the said shares (not being the price or value thereof) and further hereby covenants with the Beneficiary to hand over and or endorse over to the Beneficiary any dividend warrant or any other document of title to such dividend or sum of money as aforesaid and to instruct the said company to pay any such dividend or such sum of money to the Beneficiary To Hold the same unto the Beneficiary absolutely during the term of her natural life.
The Raghuvanshi Mills Ltd., Bombay (a public limited company), has filed this appeal by special leave against the judgment and orders of the High Court of Bombay dated March 10, 1953, and September 1, 1955. By the first order, the Bombay High Court directed the Income-tax Tribunal to submit a supplementary statement of the case in the light of its judgment, giving the parties liberty to lead further evidence, if any. By the second order, the High Court re-framed the question and answered it against the assessee.The assessee company's issued and subscribed capital was, at the material time, Rs. 10,00,000 divided into 10,000 shares of Rs. 100 each. Prior to November 14, 1941, one Maganlal Parbhudas, who was a director of the company, held 6,344 shares. On November 14, 1941, he made a gift of 1,000 shares to each of his five sons Ravindra, surendra, Bipinchandra, Hareschandra and Krishnakumar. We are concerned with the account year of the company, April 1, 1942, to March 31, 1943, the assessment year being 1943-44. In that year, the dividend which was declared at the annual general meeting held on December 17, 1943, was less than what was required under section 23A of the Indian Income-tax Act. The question, therefore, arose whether the company could be said to be one to which section 23A(1) of the Act was applicable, regard being had to the third proviso and the Explanation under it.Directors cannot, by reason of being directors, be said not to be members of the public. To that extent, the judgment is erroneous. There is a finding by the Tribunal in the supplementary statement of the case that the shares held by Bipinchandra, Harishchandra and Krishnakumar were under the control of their father, Maganlal Parbhudas. Their holding was 3,000 and with Maganlal's holding of 1,344 shares, makes up a total of 4,344 shares. Though the question as framed by the High Court appears to have been correctly answered in the negative, it does not dispose of the matter. The question to be determined still is whether more than 75 per cent. of the shares are not beneficially held by the public. We accordingly set aside the judgment and order of the High Court and direct the High Court to decide the question originally framed by it, viz.
In Commissioner of Income-tax v. Poona Electric Supply Co. Ltd. it was held by a Division Bench of the Bombay High Court that the amount received from the Government of Bombay by the Poona Electric Company in reimbursement of expenses incurred for constructing new supply lines for supplying energy to new areas not previously served was a capital receipt and not a trade receipt. The question of the taxability of the " profit element " in the contribution received from the Government was not expressly determined; but the court in that case held that the entire amount received by the Poona Electric company from the Government as contribution was a capital receipt.In Monghyr Electric Supply Co. Ltd. v. Commissioner of Income-tax it was held that the amount paid by the consumers of electricity for meeting the cost of service connections was a capital receipt in the hands of the electricity undertaking and not a revenue receipt and the difference between the amount received on account of service connection charges and the amount immediately not expended was not taxable as revenue.The receipts though related to the business of the assessee as distributors of electricity were not incidental to nor in the course of the carrying on of the assessee's business ; they were receipts for bringing into existence capital of lasting value. Contributions were not made merely for services rendered and to be rendered, but for installation of capital equipment under an agreement for a joint venture. The total receipts being capital receipts, the fact that in the installation of capital, only a certain amount was immediately expended, the balance remaining in hand, could not be regarded as profit in the nature of a trading receipt. On that view of the case, in our judgment, the High Court was in error in holding that the excess of the receipts over the amount expended for installation of service lines by the assessee was a trading receipt.
" When the rule speaks of a bad debt it means a debt which is a debt that would have come into the balance-sheet as a trading debt in the trade that is in question and that it is bad. It does not really mean any bad debt which, when it was a good debt, would not have come in to swell the profits. " In the present case the liability was imposed upon the respondent firm because it was treated as an agent within the meaning of section 42(1) of the Act and the liability was imposed because of the deeming provision in sub-section (2) of section 42 of the Act. Can it be said, in the present case, that the liability imposed upon the respondent firm was a business debt arising out of the business of the respondent or to use the words of Venkatarama Ayyar, J., " springs directly from the carrying on of the business and is incidental to it or is a trading debt in the business of the respondent firm. " As we have said above, that condition has not been fulfilled and the loss which the appellant has incurred is not in its own business but the liability arose because of the business of another person and that is not a permissible deduction within section 10(1) of the Act. It is not a loss which has to be deducted in respect of the business of the respondent from the profits and gains of the respondent's business.
By virtue of section 13(1), the Mysore Income-tax Act ceased to be in operation as from April 1, 1950, except for the purposes of levy, assessment and collection of income-tax and super-tax in respect of any period which was not included in the previous year for the purposes of assessment under the Indian Income-tax Act for the assessment year 1950-51. The appellants had been assessed for the period July 1, 1948, to June 30, 1949, under the Mysore Income-tax Act. It is manifest that for any account year which was the previous year in relation to the assessment year 1950-51, the appellants were liable to be assessed under the Indian Income-tax Act and not under the repealed Act. The year of account July 1, 1949, to June 30, 1950, was not a period prior to such previous year and therefore liability to pay tax in respect of that period could be assessed not under the Mysore Income-tax Act, but under the Indian Income-tax Act. It was urged that this interpretation of section 13 may, when the account year of an assessee does not coincide with the financial year, lead to double taxation of the income for the account year ending between April 1, 1949, and March 31, 1950. But in order to avoid the contingency envisaged by the appellants, the Central Government has, in exercise of its power under section 60A of the Indian Income-tax Act, issued the Part B States (Taxation Concessions) Order, 1950, which by clause 5(1) provides amongst other things, that the income, profits and gains of any previous year ending after the 31st day of March, 1949, which is a previous year for the State assessment year 1949-50 shall be assessed under the Act (Indian Income-tax Act, 1922) for the year ending on the 31st March, 1951, if and only if such income, profits and gains have not, before the appointed day, been assessed under the State law. If, in respect of the previous year for the purposes of the assessment year ending 31st March, 1951, the appellants had been assessed by any State Government under a law relating to income-tax in force in the State, the Indian income-tax authorities would be incompetent to assess income for that year ; but in default of such assessment income of the appellants for that year was assessable under the Indian Income-tax Act.
If the purpose of the acquisition of a large block of shares at a price which exceeded the current market price by a million rupees was the acquisition of the managing agency, the inference is inevitable that the intention in purchasing the shares was not to acquire them as part of the trade of the appellants in shares. The Tribunal found that the Dawn Mills' shares were acquired by the appellants for obtaining the managing agency of the Mills. The agency was acquired by virtue of the voting power which the appellants obtained having purchased a very large block of shares, and for acquiring the managing agency the appellants did not pay any distinct consideration. The managing agency is manifestly the source of profit of the appellants ; but the shares purchased and the managing agency acquired were both assets of a capital nature and did not constitute stock-in-trade of a trading venture. If the shares were acquired for obtaining control over the managing agency of the Dawn Mills, the fact that the acquisition of the shares was integrated with the acquisition of the managing agency did not affect the character of the acquisition of the shares. Subsequent disposal of some out of the shares by the appellants could also not convert what was a capital acquisition into an acquisition in the nature of trade. The High Court was therefore right in holding that the acquisition of the managing agency was an acquisition of a capital asset and the loss incurred by sale of the 400 shares was of a capital nature. The High Court was also right in dismissing the notice of motion for an order directing the Tribunal to refer the question suggested by the appellants. If the acquisition of the shares was not acquisition of a stock-in-trade, but of a capital asset, the appellants, by valuing the shares at cost or market price whichever was lower, could not bring the difference between the purchase price and the valuation made by them into their trading account.
The rules which have been framed under section 26A quite clearly show that a minor who is admitted to the benefits of partnership need not sign the application for registration. The law requires all partners to sign the application, and if the definition were to be carried to the extreme, even a minor who is admitted to the benefits of partnership would be competent to sign such an application. The definition is designed to confer equal benefits upon the minor by treating him as a partner ; but it does not render a minor a competent and full partner. For that purpose, the law of partnership must be considered, apart from the definition in the Income-tax Act.Section 30 of the Indian Partnership Act clearly lays down that a minor cannot become a partner, though with the consent of the adult partners he may be admitted to the benefits of partnership. Any document which goes beyond this section cannot be regarded as valid for the purpose of registration. Registration can only be granted of a document between persons who are parties to it and on the covenants set out in it. If the income-tax authorities register the partnership as between the adults only contrary to the terms of the document, in substance a new contract is made out. It is not open to the income-tax authorities to register a document which is different from the one actually executed and asked to be registered. In our opinion, the Madras view cannot be accepted.
The assessee company, which carried on business in sand and gravel, purchased two unworked deposits. The company contended that the payments made to acquire the deposits were deductible being expenditure which was incurred in the acquisition of trading stock or otherwise of revenue character. It was held that the company had acquired a capital asset and not stock-in-trade, The case turned upon a finding by the Special Commissioners and is not helpful. Reliance was also placed on Rajah Manyam Meenakshamma v. Commissioner of Income-tax. In that case certain fixed sums of money were paid as royalty for the whole period of the lease which were held to be revenue receipts as consolidated advance payments of the amount which would otherwise have been payable periodically.None of these cases is of any assistance to the respondent's case. The question which has to be decided is what was the nature of the transaction. The covenants in the licence show that the licensee had a right to enter upon the land and take away and appropriate samples of all bauxite of every kind up to 100 tons and, therefore, there was a transfer of the right the consideration for which would be a capital payment.High Court answered the question in favour of the appellant who will have his costs in this court and the High Court.
The appellants carry on various businesses, and one such business was the running of a theatre and restaurant, called the Eros Theatre and Restaurant. In October, 1943, a subsidiary company called the Eros Theatre and Restaurant Ltd. was formed. The paid-up capital of the subsidiary company was Rs. 7,90,100 divided into 7,911 shares of Rs. 100 each. 7,901 shares were allotted to the appellant company as consideration for assets, goodwill, stock-in-trade and book debts which were taken over by the subsidiary company, and the remaining 10 shares were held by the Cambatta family." The goodwill of a business is the benefit which arises from its having been carried on for some time in a particular house, or by a particular person or firm, or from the use of a particular trade mark or trade name. "It will thus be seen that the goodwill of a business depends upon a variety of circumstances or a combination of them. The location, the service, the standing of the business, the honesty of those who run it, and the lack of competition and many other factors go individually or together to make up the goodwill, though locality always plays a considerable part. Shift the locality, and the goodwill may be lost. At the same time, locality is not everything. The power to attract custom depends on one or more of the other factors as well. In the case of a theatre or restaurant, what is catered, how the service is run and what the competition is, contribute also to the goodwill.From the above, it is manifest that the matter of goodwill needs to be considered in a much broader way than what the Tribunal has done. A question of law did arise in the case, and, in our opinion, the High Court should have directed the Tribunal to state a case upon it.
The appellant company was incorporated in the year 1947. Its objects, intet alia, were to acquire as a going concern activities, functions and business of the Delhi Stock & Share Exchange Limited and the Delhi Stock and Share Brokers Association Limited and to promote and regulate the business of exchange of stocks and shares, debentures and debenture stocks, Government securities, bonds and equities of any description and with a view thereto, to establish and conduct stock exchange in Delhi and/or elsewhere. Its capital is Rs. 5,00,000 divided into 250 shares of Rs. 2,000 each on which dividend could be earned. The appellant company provided a building and a hall wherein the business was to be transacted under the supervision and control of the appellant. The appellant company also made rules for the conduct of business of sale and purchase of shares in the exchange premises. The total income for the year 1947-48 was Rs. 29,363 out of which a sum of Rs. 15,975 shown as admission fees was deducted and the income returned was Rs. 13,388. In the profit and loss account of that year members' admission fees were shown as Rs. 9,000 and on account of authorised assistants' admission fees Rs. 6,875. The Income-tax Officer who made the assessment for the year, 1947-48 disallowed this deduction. The return for the following year also was made on a similar basis but the return for the years 1949-50 and 1950-51 did not take into account the admission fees received but in the director's report the amounts so received were shown as having been taken directly into the balance sheet. The Income-tax Officer, however, disallowed and added back the amount so received to the income returned by the appellant.
This is an appeal pursuant to a certificate of the High Court of Bombay against the judgment and order of that court in Income-tax Reference No. 10 of 1958, answering the question referred to it against the assessee whose legal representatives are the appellants before us, the respondent being the Commissioner of Income-tax.The facts which have given rise to the appeal are that the late Mr. Anantrai P. Pattani, hereinafter called the assessee, was by Hazur Order dated December 10, 1937, appointed the Chief Dewan of Bhavnagar State. On January 15, 1948, the Maharaja of Bhavnagar introduced responsible Government in his State and appointed the assessee as the Chairman of the Bhavnagar Durbar Bank but he received no salary for that post. On the same date by another Hazur Order the Maharaja granted a monthly pension of Rs. 2,000 to the assessee.
The appellant company contends that under section 18(2) of the Income-tax Act, it was bound to deduct the tax computed at the appropriate rate on the salary payable to the respondent as the amount due under the decree represented salary. Section 18, sub-section (2), of the Income-tax Act, in so far as it is material, provides that any person paying any amount chargeable under the head " salaries " shall at the time of payment deduct income-tax and super-tax at the rate representing the average of the rates applicable to the estimated total income of the assessee under the head " salary ". Sub-section (7) declares that a person failing to deduct the taxes required by the section shall be deemed to be an assessee in default in respect of such tax. The Legislature has, it is manifest, imposed upon the employer the duty to deduct tax at the appropriate rate on salary payable to the employee and if he fails to do so, the tax not deducted may be recovered from him. But the liability to deduct arises in law, if the amount is due and payable as salary. In this case, there has been no assessment of tax due by the Income-tax Officer on the amount payable to the respondent. Under section 46(5), any person paying salary to an assessee may be required by the Income-tax Officer to deduct arrears of tax due from the latter and the employer is bound to comply with such a requisition and to pay the amount deducted to the credit of the Government. But this order can only be passed if income-tax has been assessed and has remained unpaid. It is undisputed that at the material time, no tax was assessed against the respondent ; the Income-tax Officer had, accordingly, no authority to issue a notice under section 46(5).
C. A. Abraham, hereinafter referred to as the appellant, and one M. P. Thomas, carried on business in food grains in partnership in the name and style of M. P. Thomas & Company at Kottayam. M. P. Thomas died on October 11, 1949. For the account years 1123, 1124 and 1125 M. E., corresponding to August 1947-July 1948, August 1948-July 1949 and August 1949-July 1950, the appellant submitted as a partner returns of the income of the firm as an unregistered firm. In the course of the assessment proceedings, it was discovered that the firm had carried on transactions in different commodities in fictitious names and had failed to disclose substantial income earned therein. By order dated November 29, 1954, the Income-tax Officer assessed the suppressed income of the firm in respect of the assessment year 1124 M. E. under the Travancore Income-tax Act and in respect of assessment years 1949-50 and 1950-51 under the Indian Income-tax Act and on the same day issued notice under section 28 of the Indian Income-tax Act in respect of the years 1949-50 and 1950-51 and under section 41 of the Travancore Income-tax Act for the year 1124 M. E., requiring the firm to show cause why penalty should not be imposed. These notices were served upon the appellant.The Income-tax Officer after considering the explanation of the appellant imposed penalty upon the firm of Rs. 5,000 in respect of the year 1124 M.E., Rs. 2,000 in respect of the year 1950-51 and Rs. 22,000 in respect of the year 1951-52, Appeals against the orders passed by the Income-tax Officer were dismissed by the Appellate Assistant Commissioner. The appellant then applied to the High Court of Judicature of Kerala praying for a writ of certiorari quashing the orders of assessment and imposition of penalty.
This is an appeal by the Commissioner of Income-tax with a certificate against the judgment and order of the High Court at Patna answering two questions of law referred to it under section 66(1) of the Income-tax Act by the Tribunal in the negative. Those questions were :" (1) Whether in the circumstances of the case assessment proceedings were validly initiated under section 34 of the Indian Income-tax Act ?(2) If so, whether in the circumstances of the case the amount received from interest on arrears of agricultural rent was rightly included in the income of the assessee ? " The assessee, the Maharaja Pratapsingh Bahadur of Gidhaur, had agricultural income from his zamindari for the four assessment years, 1944-45 to 1947-48. In assessing his income to income-tax, the authorities did not include in his assessable income interest received by him on arrears of rent. This was presumably so in view of the decision of the Patna High Court. When the Privy Council reversed the view of law taken by the Patna High Court in Commissioner of Income-tax v. Kamakhya Narayan Singh the Income-tax Officer issued notices under section 34 of the Indian Income-tax Act for assessing the escaped income.