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1962 (1) TMI 7 - SC - Income TaxWhether the aforesaid sum of ₹ 26,255-0-0 and ₹ 11,272-0-0 being selling commission credited to the aforesaid non-resident company's account in the books of the assessee are chargeable in the hands of the assessee under section 4(1)(a) for the assessment years 1949-50 and 1950-51 ? Whether the amounts in the two account years can be said to be received by the Japanese company in the taxable territories? Held that:- Clauses (a) and (c) of section 4(1) can be read disjunctively, and clause (a), which provides for receipt of income, profits and gains in the taxable territories cannot be subjected to the limitation that the income must also accrue or arise in the taxable territories. To make clause (a) depend on clause (c) is to make the " accrual " the test, while clause (a) only considers receipt in the taxable territories sufficient. The clauses are capable of being read independently though, sometimes, they may operate together. The amount must be held, on the terms of the agreement, to have been received by the Japanese company, and this attracts the application of section 4(1)(a). Indeed, the Japanese company did dispose of a part of those amounts by instructing the assessee firm that they be applied in a particular way. In our opinion, the High Court was right in answering the question against the assessee. Appeal dismissed.
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