TMI Blog1921 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... he Company which were made from the manufacture carried on at Aurangabad can be said to accrue or arise in British India on account of the Head Office being in Bombay and because the Directors control the business in Bombay. The important section is Section 3, Sub-section 1, of the Act (VII of 1918): Save as hereinafter provided, this Act shall apply to all income from whatever source it is derived, if it accrues or arises or is received in British India, or is, under the provisions of this Act, deemed to accrue or arise or to be received in British India. It is admitted tint none of the provisions of the Act which deal with the question whether income shall be deemed to accrue or arise in British India apply to this case. And it is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich should be taxed, or that income which had previously been exempted from taxation should thereafter be taxed. Section 3 which defines what income shall be taxed re-enacts the corresponding section of the Act of 1886 and it had to be admitted by the learned Advocate General that unless he could show that these profits could have been taxed under Act II of 1886 they could not now be taxed under Act VII of 1918. He was, therefore, forced to contend that the profits from the manufacture carried on at Aurangabad must be held by the Court to accrue or arise in British India because the affairs of. the Company were directed from Bombay. No authorities have been cited for the proposition that because the affairs of a Company are directed from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were carried out. That question would not arise in this case because all the four processes are carried out in the territories of His Exalted Highness the Nizam. Therefore it seems to me clear that the profits of this Company arise or accrue in the territory of His Exalted Highness the Nizam outside British India and cannot be said to accrue or arise in British India because it happens that the Board of Directors manage the business from Bombay. It does not appear to me to make much difference of what nature their control is over the management of the Mills at Aurangabad, whether the Manager there has in effect supreme control over the purchase of cotton and the sale of cloth, or whether he has aurangabad to submit to the directions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccruing outside British India can be taxed as accruing in British India because the company is registered in British India is a question of law and certainly falls within the purview of Section 51 of the Indian Income Tax Act. 6. The assesses is entitled to his costs of the reference. 7. As regards the question of costs there are no rules which lay down whether a inference under the Indian Income Tax Act should be treated as being heard on the Appellate Side or on the Original Side. This reference is made to the High Court at the instance of the Chief Revenue Authority of Bombay within the local limits of the original jurisdiction of the Court and I think therefore the proper order is that the costs should be taxed as on the Original ..... X X X X Extracts X X X X X X X X Extracts X X X X
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