Law:

Section:

Income-tax Act (XI of 1922), Ss. 25 (4) do 10-Succession Relief-Claim admissible in respect of income, profits and gains assessable under S. 10 only.   Ambalal Himatlal v. Commissioner of Income-tax and Excess Profits Tax, Bombay North 20 I T R 280 rel.   In the matter of Commercial Properties, Ltd. A I R 1928 Cal. 456 and Commissioner of Income-tax, Bombay v. Chugandas 38 I T R 241 ref. JUDGMENT   FARUQUI, J.-The Income-tax Appellate Tribunal, Karachi, has under section 66 (1) of the Income-tax referred the following question for the opinion of this Court   "Did the following sources of income-   Interest on securities,   Dividends, and   Income from property amount to the income of the business of a bank and whetheraccordingly the assessee applicant was entitled to relief under section 25 (4) of the Income-tax Act, 1922 in the circumstances of the case?"   The applicant before the Tribunal was the Imperial Bank of India which had a branch at Karachi which functioned till the 30th of June 1955, when it was succeeded by the State Bank of India. The account year of the bank was the calendar year. A claim was made by the Imperial Bank of India under section 25 (4) of the Income-tax Act that its income in the calendar year 1955, i.e., from 1st January 1955, to 30th June 1955, may be substituted for the income of the previous account year, i.e., from 1st January 1954 to 3ist December 1954. This claim was made not only in respect of the profits and gains of business but also in respect of the income derived from interest on securi ties, dividends and immovable property. The Department did not contest the claim of the applicant in regard to substitution but contended that the substitution permissible was only in respect of the income from profits and gains of business which was taxable under section 10 of the Act. It thus excluded for the purposes of substitution the income from property, dividends and from securities by way of interest which are taxable under different sections of the Income-tax Act. This position was maintained by the Income-tax Officer, the Appellate Commis sioner and the Tribunal.   In order…