1. The question referred to us is in the following terms:
When a man has profits earned more than three years before the year of assessment and also profits earned within that period to his credit in a trade carried on by him outside British India, is there any presumption, that a remittance made to him in British India of a sum which might fall in either set of profits is made from the earlier profits and not from the later.
2. Under Section 4 (2) of the Act profits and gains of a business accruing or arising without British India to a person resident in British India shall, if they are received in or brought into British India, be deemed to have accrued or arisen in British India and to be profits and gains of the year in which they are so received or brought, notwithstanding the fact that they did not so accrue or arise in that year provided that they are so received or brought in within three years of the end of the year in which they accrued or arose. That appears to us to be a clear intimation that sums remitted to British India are to be deemed to have accrued or arisen in the year of remission unless they accrued or arose more then three years before. We entertain no doubt that the effect of that must be to cast upon the assessee the burden of proving that the profits accrued or arose more than three years back, a matter after all peculiarly within his knowledge and not within the knowledge of the income-tax authorities. That is an answer to the reference and it is clear that the Commissioner acted on that principle; and whether he came to a right conclusion of fact in the light of it is not for us. It is no doubt true that, in appending reasons for his own opinion on the point he was referring as he is directed under the Act to do, he announced some very dubious propositions of law. That does not alter the position that in para. 5 of his review order he dealt with the question of fact unvitiated by any such misdirection of himself and dealt with it adversely to the assessee. The answer to the Reference is in the negative.
3. The assessee must pay Rs. 250 for the costs of the Commissioner.