1953 (12) TMI 1 - SUPREME COURT

Whether in view of the finding of fact in this case that the entire profits were received in India and the company is liable to tax under Section 4(1)(a) of the Act, the provisions of Section 42(1) have any relevancy ?

Can the income received in India be said to arise in India within the meaning of Section 4A(c)(b) of the Act ? If not, should only those profits determined under Section 42(3) as attributable to the operations carried out in India be taken into account for applying the test laid down in Section 4A(c)(b) ?

Held that:- Answer to question No. 1 in the negative.

Answer to question No. 2 - The income received in British India cannot be said to wholly arise in India within the meaning of Section 4A(c)(b) of the Act and that there should be allocation of the income between the various business operations of the assessee company demarcating the income arising in the taxable territories in the particular year from the income arising without the taxable territories in that year for the purposes of Section 4A(c)(b) of the Act. Appeal allowed.