Judgment

SHAH, J.

M/s.Chugandas and Co. - a firm dealing in securities - received in the year 1946 Rs. 4,13,992/- as interest on securities held by it. In 1947, it received Rs. 1,01,229/ - as interest from the same source. On June 30, 1947 the firm discontinued its business. In proceedings for assessment for 1947-48 and 1948-49 the firm, relying upon S. 25(3) of the Indian Income-tax Act 1922, claimed exemption from payment of tax on income earned in the relevant previous year, on the plea that the firm was carrying on business before the Indian Income-tax Act, 1922, was enacted, and on that business, tax had been charged under the provisions of the Indian Income-tax Act 7 of 1918 in respect of the business done immediately before that Act was repealed. The firm also applied to substitute the income earned in the year 1947 for to income of the previous year. The Income-tax Officer held that the interest earned by the firm on securities being "liable to be assessed to tax" under S. 8 and not under S. 10 of the Income-tax Act, the firm was not entitled to the benefit of the exemption claimed. The order of the Income-Tax Officer was confirmed in appeal by the Appellate Assistant Commiss