Alfred Henry Lionel Leach, C.J.
1. For the purpose of deciding the question referred in this case we think it necessary to know whether the expenses of the rubber plantations' were debited to the assessee's money-lending business and whether the income; from the plantations was brought in as part of the profits of that business. In these circumstances we refer the case back to the Income-tax Appellate Tribunal under the provisions of Section 6(5(4) for a statement of the facts.
2. The reference will stand adjourned until this further statement has been received.
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3. After the return of statement of facts, the judgment of the Court was delivered by
Alfred Henry Lionel Leach, C.J.
4. The Income-tax Appellate Tribunal has submitted the further statement of facts called for by this Court in its order of the and March, 1945. The facts are now clear and they may be stated shortly as follows:
5. The assessee, his father and his brother Narayanan Chettiar constituted an undivided Hindu family, but partition was effected in 1925. Before the separation the family had carried on a money-lending business in partnership with another person at Bhattu Pahat in Malaya. Under the terms of the separation the entire assets of the money-lending business at Bhattu Pahat fell to the father's share. The, sons then started separate money-lending businesses of their own in Burma. In 1939, the father decided to retire from business. In addition to the assets of the money-lending business at Bhattu Pahat, he was possessed of certain rubber and cocoanut plantations. After reserving for himself sufficient to live upon, he divided the rest of his assets between his two sons. Each of them received a rubber plantation and a cocoanut plantation at Bhattu Pahat in addition to equal shares in the assets of the money-lending business. Thereupon each of them started a money-lending business at Bhattu Pahat. The assessee entered in the books of account of his money-lending business the values of the two plantations which had been given to him. They were treated as being part of the capital of the money-lending business. In these accounts the expenses of running the estate were debited and the profits accruing therefrom were entered as profits of the money-lending business. In the year of account the assessee sold a portion of the rubber plantation and entered the sale proceeds in the accounts of his business. The sale showed a profit. The question in this case is whether this profit was liable to income-tax. The tribunal held that it was but referred to this Court for decision the following question :
Whether in the circumstances of this case, the profit arising on sale of the property was liable to income-tax.
6. We consider that the decision of the tribunal was clearly right. The plantations formed part of the asesssee's capital of his money-lending business and the profit made on the sale of a part of the rubber plantation was included in the profits of the business. We answer the question referred in the affirmative.
7. The assessee must pay the costs of the Commissioner, Rs. 250.