1958 (5) TMI 2 - SC - Income Tax

Whether the appellant is chargeable to tax under section 42(2) Of the Act?

Held that:- What we have to decide is whether having regard to the course of dealings between the non-resident companies and the appellant it can be said of the former that they carry on business with the latter within the meaning of section 42(2). Now, it should be observed that section 42 speaks not of the non-residents carrying on business in the abstract but of their carrying on business with the resident, and in the context, it must include all activities between them having relationship to their business. That is the view taken by the learned judges in the court below, and we are in agreement with it.

We are accordingly of opinion that, on the facts found, the non-resident companies must be held to have carried on business with the appellant as provided in section 42(2). Appeal dismissed.