Judgement

Appeal (No. 129 of 1936) by special leave, from a judgment of the High Court (June 26, 1934) upon a reference by the Commissioner of Income-tax under s.66, sub-s.2, of the Income-tax Act (XI. of 1922).

The respondents were a firm of jewellers carrying on business in Delhi. They received loans from a banker carrying on business in Jaipur, outside British India, and paid interest thereon. The Income-tax Officer, on February 2, 1928, served a notice on the respondents calling on them to show cause why they should not be treated as agents of the banker in Jaipur for the purposes of the Act. No year of assessment was mentioned in the notice.

0 Law. Rep. 65 Ind. App. 12 ( 1937- 1938) Commnr. of Income-Tax, v. Nawal Kishore-Kharaiti Lal

181

The respondents appeared and were heard on February 13, 1928. No formal order declaring them agents of the banker was made, but a note was recorded and they were served with notice under ss. 22 and 34 of the Act for the years 1926-27 and 1927-28 as agents of the banker. An appeal by the respondents was dismissed. On May 5, 1931, notice was served on the respondents stating that it was proposed to treat them as agents of the banker for the yea