1. In this application under Section 66, Sub-section 3, Income-tax Act, 1922, the Commissioner of Income-tax has been given notice to show cause why he should not refer certain questions of law for the determination of this Court.
2. The facts are in brief that the assessed firm had a branch or agency operating in Ipoh, Federated Malay States. There had been an older firm there, but this was wound up and the assets, in the shape of outstandings, divided between the partners. One half of these assets in this way fell to the share of the partners in the assessed firm and were shown as a credit in its general balance. During the income-tax year 1926-27 the Ipoh branch remitted four sums of Rs. 30,000, Rs. 1,20,000 in all, to British India. The contention which the firm raises is that these remittances were derived from realizations of the old firm's outstandings, and were therefore mainly capital. The Income-tax department has declined to accept this explanation, and has acted upon the ordinary presumption that, to the extent that profits were made at Ipoh-about Rs. 53,000-the remittances were composed of these.
3. The learned Advocate General, who appears for the applicants, virtually has to argue that the Commissioner of Income-tax must accept as conclusive accounts and statements produced by the firm showing the source from which these remittances were derived; any less qualified proposition will not serve his purpose, because the matter becomes then one of evidence, and the Commissioner's decision upon the evidence is final. It will be seen from the Commissioner's order dated 16th July 1927 declining to state a case for the determination of this Court that the claim was disposed of on the ground that the petitioners had not proved by means of their accounts, which the Income-tax Officer had duly examined, that the remittances (to the extent referred to) were not profits liable to tax. That being so, there is no question but that the assessment is good in law. It is not our business to scrutinize the evidence, but in view of certain aspects of it which have been brought to our notice during the arguments we may add that the collections of old outstandings, as made, appear to have been added to the general balance of the firm, and that the remittances were made from that general balance; further, that, upon the applicants' own showing (statement 4) when the first remittance was made on 31st July 1925, a sufficient sum had not yet been realized from the old outstandings to meet it. These circumstances suggest that the accounts themselves are not conclusive of, if indeed compatible with, the applicant's case.
4. We dismiss the application with costs. Advocate's fee, Rs. 150.