THE COMMISSIONER OF INCOME TAX v. R.M A.R A.R R.M ARUNACHALAM CHETTIAR

031-NLR-NLR-V-37-THE-COMMISSIONER-OF-INCOME-TAX-v.-R.M-A.R-A.R-R.M–ARUNACHALAM-CHETTIAR.pdf


The Commissioner of Income Tax v. RM. A.R. A.R. RJtf.
145
1935
Present: Akbar S.P.J. and Maartensz J.
THE COMMISSIONER OF INCOME TAX v.
R.M. A.R. A.R. R.M. ARUNACHALAM CHETTIAR.
D. C. (Inty.) Colombo, 24.
Income Tax—Unpaid interest due for the period of assessment—Recoverableloans—Income Tax Ordinance, No. 2 of 1932, ss. 6, 9 (1).
A money-lender may be assessed for Income Tax in respect of unpaidinterest on recoverable loans which fell due during the period for whichprofits are ascertained.
HIS was a case stated by the Board of Review under section 74 of the
X Income Tax Ordinance on the application of the Commissioner ofIncome Tax.
The respondent was a firm carrying on the business of money-lendingin Ceylon, and his income was assessed for the year 1932-1933 atRs. 79,830. It included a sum of Rs. 32,000 which was a fair estimate ofthe unpaid interest which fell due on recoverable loans during the yearpreceding the year of assessment. The question referred to the SupremeCourt was whether in law the assessment should be reduced by Rs. 32,000.
M.W. H. de Silva, Acting S-G. (with him Basnayake, C.C.), for Com-missioner of Income Tax, the appellant.—The Board of Review is wrongin disregarding section 47 (re-enacted as sub-section (3), section 9).Income Tax on income which accrues by way of interest was not leviedin India; but later, by an amendment of the law in 1922, tax is to belevied (assessed) in India according to the system of bookkeeping resortedto by individual taxpayers. Our view point is a different one, and noassistance can be obtained through Indian cases.
Two things are taxed in Ceylon: — (1) Profits, and (2) Income; andnot merely income. Profits are not received; they are made. Income isreceived. Profits are liable to be taxed whether they come in or not.
By section 9 (1) (d) of our Ordinance, provision is made for allowancesfor bad debts; this connotes the existence of good debts. If there is adiscretion to allow deductions for bad debts, there should be a similardiscretion to include good debts in profits. In England, in assessing theprofits of a business, one has to take into consideration debts, good as wellas bad. See Scottish Mortgage Company of New Mexico v. Surveyor ofTaxes1, where it was held the Crown had the right to tax under thatheading most favourable to the revenue.
It is well settled that it is for the Crown to choose in which capacity thetax is to be charged. See Liverpool and London Globe Insurance Companyv. Bennett2 and The Rosyth Building and Estates Co., Ltd. v. P. RogerslSurveyor of Taxes) 3.
A practice of the revenue authorities not warranted by statute cannotbe upheld in a Court of law—see judgment of the Privy Council in GleanerCompany Ltd. v. Assessment Committee *. Therefore, in this case it wasopen to the Commissioner to assess on the basis of profits of abusiness or of an investment. In his own interest, the Commissioner has
1 2 Tax Cases 165.3 8 Tax Cases 11 at p. 16.
* 6 Tax Cases 397.* (1922) 2 A. C. 169 at 175.
T
146
The Commissioner of Income Tax v. R.M. A.R. A.R. R.M.
assessed the respondent as on an investment. If it was necessary, theCommissioner would have been justified in calling in aid section 9, sub-section (3). But it was not necessary.
The profits are to be determined in the ordinary commercial way. SeeGresham Life Assurance Society v. Styles'. For meaning of “ profits ”,see In re the Spanish Prospecting Company Ltd.2
If the assessee’s own system of accounts is accepted as the basis ofassessment, then assessee may possibly so adjust his accounts as to evadeliability to pay any tax whatever.
There is no power in England to make a contingent assessment; withus there is provision to defer collection of the tax, after assessment hasbeen made.
Counsel also cited 2 Tax Cases 437, 441; 3 Tax Cases 189; 5 TaxCases 221 at 223, 491; 12 Tax Cases 282, 338, 382, 740, 780, 813at 823, 1027; 13 Tax Cases 874; 15 Tax Cases 613 at 620; 16 TaxCases 414; 17 Tax Cases 325 at 332; Dowell on Income Tax; and Hall& Company v. Commissioners of Inland Revenue ’.
H. V. Perera (with him N. Nadarajah and Aiyer), for assessee, respond-ent.—If the new section 47 does apply, the contention of the Crowncannot prevail.
Income Tax law does not compel persons to keep their accounts in anyparticular way. The assessee may include a debt, and ask for relief; orhe may exclude it. The Chettiars keep heir accounts on what is knownas a cash basis. There is nothing sacrosanct in any particular way inwhich mercantile men keep accounts.
We are only concerned with the question whether the word “ profits ”in section 6 (1) (a) means income. The meaning would be what is usuallyregarded as profits in the particular vocation or business or employment.The word “ income ” or the word “ profits ” ordinarily implies moneythat has come in, and does not include debts or choses in action. Bothwords connote the same thing. The primary meaning of the word" profits ” must be given to the word in the Ordinance.
Section 9 (1) (d) cannot apply in the case of persons who keep accountson a cash basis. It applies only in the case of those persons who hadadopted the system of accounting which brought in debts. See the caseof the Secretary to Board of Revenue, Income Tax, Madras v. ArunachalamChettiar
The reason why in certain businesses unrealized debts are ^regarded asprofits is because of a certainty of realization.
Section 9, sub-section (3), does not apply. It applies only to a sourceof income falling under section 6(1) (e), not to one falling under section 6(1) (a). Cf. the argument of the Solicitor-General in 35 N. L. R. 291at p. 292; and section 21 of Ordinance No. 27 of 1934, which replacessection 47 of Ordinance No. 2 of 1932.
Where the categories are mutually exclusive, then there is no Crownoption.
Section 9, sub-section (3), was always understood to apply only toinvestments. In this case we have been assessed on the footing of an
2 Tax Cases 633.3 (1921) 3 K. B. 152.
(1911) 1 Ch. 92 at 98.* I. L. R. 44, Mad. 65; 1 I. T. C. 75.
AKBAR S.P.J.—The Commissioner of Income Tax v. RM. A.R. A.R. R.M. 147
income coming under section 6 (1) (a). When that is so, the effect ofthe new section 47 is to make section 9 (3) inapplicable.
Counsel also cited 17 Tax Cases 325 at 329 (per Lord Clyde); Tennent v.Smith 1 (per Lord Halsbury) : “ Income Tax is primarily a tax on (your)income; but presumption may be rebutted London County Council v.Attorney-General1: “ Income Tax is one tax; it is not a collection oftaxes; there is no difference in kind ”; Lambe v. Inland RevenueCommissioner *, St. Lucia Estate Company v. Colonial Treasurer *.
Cur. adv. vult.
November 11, 1935. Akbar S.P.J.—
This is a case stated by the Board of Review on the application of theCommissioner of Income Tax under section 74 of the Income Tax Ordi-nance for determination by this Court. The assessee is a firm carryingon a business in Ceylon mainly of money-lending, and, for the year1932-1933 the respondent’s income was assessed at Rs. 79,830 includinga Siam of Rs. 32,000 which is the subject-matter of the dispute arising inthis case. It was agreed between the parties that this sum of Rs. 32,000would be a fair estimate of the unpaid interest which fell due for paymentduring the year preceding the year of assessment on recoverable loans,i.e., of interest regarding the recovery of which there could be no reason-able doubt. There was an appeal to the Board of Review from theCommissioner’s assessment and the Board of Review allowed the appealof the respondent and reduced the assessment of Rs. 79,380 by deletingtherefrom the amount of Rs. 32,000. The question referred to us fordecision is whether in law the assessment should be reduced by the sumof Rs. 32,000, which was admitted by both parties as a correct estimate ofthe amount of interest which had become due (although it had remainedunpaid) during the year preceding the year of assessment on good loans,and which interest the respondent was certain could be collectedultimately, as such interest had become due in the course of the money-lending business carried on by the assessee.
It will be noticed that the case stated mentions the fact that theassessee carries on a business in Ceylon “ mainly of money-lending ”.It was admitted at the hearing before us that the assessee also carries ona business in rice in addition to his main business of money-lendng.Under section 5 (1) of the Income Tax Ordinance, 1932, as amended byOrdinances No. 7 of 1932, No. 21 of 1932, and No. 27 of 1934 (referred toin this judgment as the Income Tax Ordinance) an income tax is chargedin respect of the profits and income of every person resident in Ceylon orarising in or derived from Ceylon, in the case of every other person. Bysub-section (2) of that section the term “ profits and income arising in orderived from Ceylon ”, includes, without in any way limiting the meaningof the term, “ all profits and income …. derived from servicesrendered in Ceylon, or from property in Ceylon, or from business trans-acted in Ceylon whether directly or through an agent ”. Section 6defines the expression “ profits and income ” for the purposes of theOrdinance under eight sub-heads; 6 (1) (a) specifying the profits from
‘ (1892) A. C. 150.-3 (1034) IK. B. 178.
2 (1901) A. C. 26 at p. 35.3 (1924) A. C. 508.
148 AKBAR S.P.J.—The Commissioner of Income Tax v. R.M. A.R. A.R. RM.
any trade, business, profession, or vocation for however short a periodcarried on or exercised; (6) (1) (e) referring to dividens, interest, ordiscounts; and the last sub-head 6 (1) (h) referring to income from anyother source whatever not including profits of a casual and non-recurringnature.
Chapter III. deals with the ascertainment of profits or income andsection 9 enumerates what shall be deducted for the purpose of ascertain-ing the profits or income. Section 9 (1) starts with the qualification thatsubject to sub-sections (2) and (3) all outgoings and expenses incurred bya person in the production of the profits or income are to be deducted.The section states that the outgoings and expenses are to include out-goings and expenses falling into seven categories which are set forth insub-heads. Sub-head (d) of section 9 (1) allows a deduction of such sumas the Commissioner in his discretion considers reasonable for bad debtsincurred in any trade, business, profession, vocation, or employment whichhave become bad during the period of which the profits are beingascertained, and for doubtful debts to the extent that they are estimatedto have become bad during the said period, notwithstanding that suchbad or doubtful debts were due and payable prior to the commencementof the said period. The proviso to this sub-head states that all sumsrecovered during the said period on account of amounts previouslywritten off or allowed in respect of bad or doubtful debts are to be treatedfor the purposes of the Ordinance as receipts of the trade, business, &c.,for that period. I have quoted this sub-head 9 (1) (d) in extenso for thesimple reason that the words of that clause strongly support the view ofthe Commissioner of Income Tax. The sub-head expressly refers toprofits in the expression “ during the period of which the profits are beingascertained ”.
The Solicitor-General’s argument is that if in the calculation of theprofits the Commissioner is given a discretion to allow bad debts to bewritten off and to allow a reasonable sum to be fixed by him to be deducted .from the profits in respect of doubtful debts, it stands to reason that gooddebts must be included in the calculation of profits so long as they becomedue and payable during the period of which the profits are being ascer-tained. Mr. Perera argued that that sub-head only applied in the caseof those persons who carried on a trade or business who had adopted thesystem of accounting which brought in debts and that it did not apply tothose persons who carried on a trade or business who kept the system ofaccounting which only took into account actual receipts of cash, whichhe called accounting on the cash basis. That is to say, according toMr. Perera’s argument the income tax was to depend on the choice of theassessee in regard to the method of accounting. His argument wenteven further. Whatever system of accounting is adopted by the assessee,his books must show the outstanding debts due to him, but if he keepsone book or draws up a balance sheet in which only the receipts areshown, for purposes of the income tax it is this book or balance sheetwhich is to be taken as the basis of the calculation of the income taxand it is this system which is to be called the keeping of accounts on thecash basis.
AKBAB SJJ.—The Commissioner of Income Tax v. R.M. A.R. AJt. R.M. 149
The law seems to be clear that the assessment must be made and theincome tax levied on principles to be deduced from the words of theIncome Tax Ordinance whenever a question arises in and is submitted toa Court of law for decision. In other words the Crown is not bound bythe particular system of accounting adopted by the assessee (5 Tax 491;12 Tax 740 and 882). If, for purposes of practical convenience, theassessing officer agrees to accept the system of accounting adopted bythe assessee for purposes of calculating the income tax, that is a matterwhich only concerns him and the assessee so long as matters arisingtherefrom are not referred for arbitration to the law Courts. What a lawCourt is concerned with is the interpretation of the law so far as it existsand affects the points submitted for decision.
In Gleaner Company Limited v. Assessment Committee1 the PrivyCouncil observed as follows:—“ Their Lordships have been referred to thepractice of the inland revenue authorities in this country under similarprovisions, which appear to sanction the practice of permitting debtsthat are bad to be deducted in the year the loss is sustained. TheirLordships are unable to attach any weight to this practice. It may bedue either to a misunderstanding of the statute or it may be that if all theprovisions of the various English Income Tax Acts were examined theymight bear a different interpretation to those that are now before theirLordships, or again, the convenience of administration may have suggestedthis form of relief. Their Lordships are unable to appreciate how theestablishment of this practice, although it may be of long standing, canafford them assistance in the present dispute. It may however affordsome explanation of why the particular point has never been taken inEnglish Courts, although in one or two cases to which attention has beencalled it may have been relevant for discussion”. That case is also ofimportance, because section 10 of the Jamaica Ordinance expresslyincluded any debts in the income from any trade except bad debts anddoubtful debts.
Our law under Chapter III. is similiar in character to the Jamaican lawin that debts are not to be deducted in estimating the profits or income ofa trade excepting bad and doubtful debts, the only difference being thatsuch debts are expressly mentioned in the Jamaican law and they arise byimplication in our section 9 (1) (d). It will also be seen that our law isexpressly worded so as to make it different from the Jamaican law asregards the year in which bad or doubtful debts are to be deducted,probably owing to the judgment of the Privy Council.
Chapter IV. of the Income Tax Ordinance relates to the ascertainmentof what is called the statutory income of an assessee from each sourcewhich is to be the full amount of the profits or income which was derivedby him or arose or accrued to his benefit from such source during the yearpreceding the year of assessment. Chapter V. lays down rules for theascertainment of the assessable income, and it is got by taking theassessee’s total statutory income and making certain specified deductions.Chapter VI. lays down rules for the ascertainment of the taxable incomewhich is got by deducting from the assessable income certain specifieddeductions and Chapter VII. sets out the rates at which the tax is to be
* (1922) 2 A. C. p. 169.
150 AKBAR S.P.J.—The Commissioner of Income Tax v. R.M. A.R. A.R. HJVf.
charged on the taxable income. This seems to be the general scheme bywhich income tax is to be charged in Ceylon under the Income TaxOrdinance. It will be seen that the tax is to be levied on not merelyincome but also profits to be determined by the rules laid down in theOrdinance.
Mr. Perera in support of his argument laid great stress on the judgmentof the Full Bench of Madras in the case of Secretary to the Board of Revenue,Income Tax, Madras v. Arunachalam Chettiar'. But if that case iscarefully examined it will be found that it is against him. In the firstplace the Court was interpreting the words of the Income Tax Act of 1918,and the Chief Justice laid stress on the word “ income ” which appearedin section 3, the principal section which created the charge. He empha-sized that it was the income which was taxed and that income meantactual receipts. The Chief Justice quoted with approval Lord Esher’sjudgment in Gresham Life Assurance Society v. Styles in which he statedthat the balance on which income tax was charged was “ the differencebetween what was received in any three years and what it cost to obtainthose receipts ”. The Chief Justice was of opinion that this decisionsupported his interpretation that “ receipts ” meant actual moneyreceived. Lord Esher made use of similar expressions in the case of Cityof London Contract Corporation v. Styles“ How can you carry on abusiness after you have embarked your capital in the purchase of it?You must find new money in order to pay the expenses year by year;but then you do find money to pay the expenses year by year, and youget the receipts year by year, and the difference between the expensesnecessary to earn the receipts of the year, and the receipts of the yearlare the profits of the business for the purpose of the income tax ”.
Commenting on this very passage Lord Sterndale M.R. in Hall & Co. v.Commissioners of Inland Revenue ‘ said as follows:—“ Of course thelearned Master of the Rolls does not there mean by receipts money whichis actually received; he means debts which will be received, and whichtherefore on their face value require an allowance for bad debts ”.
It will be seen by a reference to that case that there was no doubt at allthat debts were to be included in reckoning the profits and loss, the onlydispute being whether the profits were to be calculated for the year inwhich the two contracts were made or when the deliveries were made.Lord Sterndale said as follows:—“As I have said, the short and simpleanswer to the respondent’s contention is that these profits were neitherascertained nor made at the time that these two contracts were concluded.Many contingencies might have happened to prevent the realization ofprofit which was anticipated when the contracts were made. Manycomplications might have occurred that might have produced a differentresult. I think that the respondents did right in the way that theycarried these profits into their accounts; it is the ordinary commercialway of making up accounts, and in my opinion, it is the right way. Itwould be wrong to carry into the accounts, as profits of one year, theestimated profits which would accrue in subsequent years and whichmight perhaps never be made at all
> I. L. R. 44. Mad. 66.2 2 Tax Cases 638.
3 2 Tax Cases 243.
« (2922) 3 K. B. 152.
AKBAR S.PJ.—The Commissioner of Income Tax v. R.M. A.R. A.R. R.M. 151
Atkin L.J. in the same case said as follows: —“ The profits for excessprofits duty are to be assessed on the same basis as profits for income taxpurposes, and the word ‘ profits ’ for income tax purposes is to beunderstood in accordance with the words of Lord Halsbury in GreshamLife Assurance Co. v. Styles * in its natural and proper sense—in a sensein which no commercial man would misunderstand ’ Referring to asimilar provision in the English law to ours, Lord Clyde in Collins & Sonsv. Commissioners of Inland Revenue' stated as follows:—“It is a generalprinciple, in the computation of the annual profits of trade or businessunder the Income Tax Acts, that those elements of profit or gain, andthose only, enter into the computation which are earned or ascertainedin the year to which the inquiry refers; and in like manner only thoseelements of loss or expense enter into the computation which are sufferedor incurred during that year That was a case dealing with excessprofits duty but the law applicable was the same as the law applicable toincome tax and the English rules in schedule D to the Income Tax Act,1918, are more or less similar to our provisions, at any rate, so far as thefact that tax was levied on profits arising or accruing from a trade isconcerned and the fact that deduction was to be made with respect to bador doubtful debts.
The Full Court decision of the Madras High Court may be distinguishedon the two grounds that the Indian Act of 1918 in section 3 referred to.income; although in section 9 the word profits is used and the sentenceis as follows: “the tax shall be payable by an assessee under the head‘ income derived from business ’ in respect of the profits of any businesscarried on by him The other ground is that there was no provision inthe Indian Act for bad or doubtful debts. It was owing to this decisionthat the law was recast in India. The charging sections have beendrafted to make it clear that the tax is leviable on income, profits, andgain; and by section 10 (3) the word “ paid ” means actually paid orincurred according to the method of accounting adopted. By section 13although the choice of the method of accounting is left to the assessee adiscretion is vested in the income tax officer to adopt any other methodof accounting if by the system adopted the income, profits, or gain cannotbe properly deduced.
So that it will be seen that the Madras case in no way supports therespondent’s contention. On the other hand the English authorities onprovisions of law similar to ours are decidedly in favour of the appellant.In the case of In re The Spanish Prospecting Company Limited * Fletcher-Moulton L.J., in a judgment which has been frequently quoted, explainedwhat profits meant in a business. The following is an extract: —
“ To render the ascertainment of the profits of a business of practicaluse it is evident that the assets, of whatever nature they may be, must berepresented by their money value. But as a rule these assets exist inthe shape of things or rights and not in the shape of money. The debtsowed to the company may be good, bad, or doubtful. The figure insertedto represent stock-in-trade must be arrived at by a valuation of the actualarticles. Property, of whatever nature it be, acquired in the course of> IS Tax Case* 780.1 (.1911) 1 Ch. 92.
152 AKBAR S.P.J.—The Commissioner of Income Tax v. R.M. AJt. A.R. RJW.
the business has a value varying with the condition of the market. Itwill be seen, therefore, that in almost every item of the account a questionof valuation must come in. In the case of a company like that withwhich we have to deal in the present case this process of valuation is oftenexceedingly difficult, because the property to be valued may be such thatthere are no market quotations and no contemporaneous sales or pur-chases to afford a guide to its value. It is not to be wondered at, therefore,that in many cases companies that are managed in a conservative manneravoid the difficulty thus presented and content themselves by referring toassets of a speculative type without attempting to affix any specific valueto them. But this does not in any way prevent the necessity of regardingthem as forming a part of the assets of the company which must be includedin the calculation by which de facto profits are arrived at. Profits mayexist in kind as well as in cash. For instance, if a business is, so far asassets and liabilities are concerned, in the same position that it was in theyear before with the exception that it has contrived during the year toacquire some property, say mining rights, which it had not previouslypossessed, it follows that those mining rights represent the profits of theyear, and this whether or not they are specifically valued in the annualaccounts.”
It is true that he said that the actual profit and loss accounts of thecompany will not bind the Crown in arriving at the income tax to be paid.But he was referring principally to the habit of writing off liberally fordepreciation.
Lord Justice Fletcher-Moulton’s judgment was quoted with approvalin Kane v. Commissioners'. In Dailunnie-Talisker Distilleries Ltd. v.The Commissioners of. Inland Revenue’, Lord Clyde said: “It is ele-mentary that a profit and loss account is not an account of receipts andexpenditure in cash only; its purpose is to show how the business stands,for better or worse, on the operations of the year ”. To adopt any otherinterpretation would be to nullify the intention of the legislature when itincluded section 9 (1) (d) in Chapter III. One of the practical difficultiesis indicated in the dissenting judgment of Sadisiva Ayyer J. in the Madrascase. I think it was to prevent an evasion of the law in the mannerindicated by this Judge that our law was drafted.
As remarked by the Solicitor-General a money-lender could so adjusthis accounts as to escape liability to be taxed. If only actual receiptswere to be taxed, he could increase his capital year by year by borrowingmoney and the interest payable by him for such loans would automatic-ally be deducted from his assessable income under section 13 (1) (a) solong as he complies with section 13 (7); for in my opinion section 13 (1)(o) (iv.) only applies when the non-payment or non-liability to pay isabsolute.
One other point was pressed on us in appeal and as it was argued atlength, I will briefly indicate it. The assessee was carrying on thebusiness of a rice merchant in addition to his main business of money-lending. The Solicitor-General argues that the assessing officer has a
» 32 Tax Cates 338.* 15 Tax Case* 620.
AKBAR S.P.J.—The Commissioner of Income Tax v. R.M. A.R. A JR. R.M. 153
right when taxing the assessee under section 6 (1) (a) to consider hisincome from the interest on loans under head 6 (1) (e) apart and then tobring it under 6 (1) (a) as part of the profits of both aspects of his businessas money-lender and rice merchant. If he is right in his contention—ashe appears to be from the opening words of section 9 (1)—then by section9 (3) the interest due is to be reckoned whether it is paid or not withoutany deductions for outgoings or expenses. And there is provision in. thesub-section for the deferring of the payment of tax and for the reductionof the assessment by the value of irrecoverable interest. Mr. Pereraargues on the contrary that the effect of section 47 is to make section 9 (3)inapplicable when the assessment is made under section 6 (1) (a). Butthe words of section 47 say that when any proyision relates expressly toany particular source of profits or income mentioned in section 6 (1) thatprovision is not to apply to the determination of any profits or incomewhich is assessable and has been assessed as falling within any other sourcementioned in that sub-section. The Solicitor-General replies that whenhe applied section 9 (3) he did so only with reference to section 6 (1) (e)and that it was after such application the profits were determinedunder section 6 (1) (a) with reference to both aspects of the assessee’sbusiness.
The question is not free from doubt. In favour of Mr. Perera’s argu-ment is the fact that under section 9 (1) all outgoings and expenses are tobe deducted, but under section 9 (3) no deductions are to be made foroutgoings and expenses. There will be some practical difficulty in givingeffect to these contradictory provisions where two or more branches ofthe business are carried on by one staff of employees, but that is not amatter which affects the interpretation of the law. The fact that section 9starts with the words that the section is “ subject to the provisions ofsub-sections (2) and (3) ” shows I think that the draftsman contemplateda business being carried on with different sources of profit enumeratedunder section 6 (1).
There are many companies, particularly insurance companies, whichinvest their savings and profits on investments. Can it be said thatsection 9 (3) only applies to an ordinary investor ? If so, why did thedraftsman say that section 9 (1) which seems to apply mostly to thoseengaged in a trade, business, profession, vocation, or employment, is tobe subject to sub-sections (2) and (3) ? I am inclined to agree with theSolicitor-General’s view. It makes no difference if the assessee carriedon solely the business of lending money, for in that case the Crown hasthe choice of assessing him either under head 6 (1) (a) or 6 (1) (e). (2 TaxCases 172; 6 Tax Cases 376; and 8 Tax Cases 15.)
If I am right, this will be an additional reason for the opinion I havealready expressed that the decision of the Board of Review was wrong.The appeal will be allowed with costs incurred in this Court, and thedeposit of Rs. 50 will be paid to the revenue and will be reckoned as partof the costs the assessee is ordered to pay. The assessment will thereforestand at Rs. 79,830.
Maartensz J.—I agree.
Appeal allowed.