1967 (9) TMI 15
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...., however, posed for reference before the Tribunal a slightly different question. They had omitted all reference to the findings of the Tribunal and had merely posed the following question: " Whether the assessee was liable to deduct under section 18(3B) of the Act, tax on interest payments of Rs. 2,224 made to the non-resident company, Messrs. Tata Ltd. ?" The Tribunal, however, has referred the question as posed by the assessee and not the latter question and before us the Commissioner has taken out a notice of motion for reframing of the question. We shall presently show after discussing the question that has been actually referred that there is really no substantial difference between the two questions and that the question as referre....
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....don, in England and, secondly, that no part of the services were performed in the taxable territories and, therefore, the amount outstanding on account of interest had only accrued in England and was therefore not subject to tax in India. The Tribunal, accepting this contention, has held that the services were rendered wholly in London and no part of them was rendered in India and, therefore, they have held that the amount of interest paid to Messrs. Tata Ltd. was "outside the scope of section 18(3B)". Upon these facts the question which we have mentioned above has been referred for our decision. Section 18(3B) provides that any person responsible for paying to a person not resident in the territories any interest (not being interest on se....
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....rofits or gains which are received or deemed to be received in the taxable territories. Clearly, therefore, upon the facts found the decision which the Tribunal reached was a correct decision. But then it was urged upon a construction of the section 18(3B) that the words used in the sub-section are "any interest ... or any other sum chargeable under the provisions of this Act" and the words "chargeable under the provisions of this Act" govern only "any other sum" but not "interest" and the word "or" by which the two clauses are separated is in the context disjunctive. Section 18 deals with every kind of deduction of income-tax and super-tax to be made at source and if one considers the several clauses of the section, in each one of those c....
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....e referred to which are chargeable under the Act there is a specific exception made in the case of interest by the use of the words "other than interest". It was contended, therefore, that this exception was specifically made in sub-section (3C) because interest under sub-section (3B) was not qualified by clause "chargeable under the provisions of this Act" and that in the light of sub-section (3C) sub-section (3B) should be so construed. When every other head of payment is dealt with under section 18, it is qualified by the word "chargeable" or by the words "chargeable under the head", etc. We can see no reason or principle why the legislature should exempt interest from the qualification that it should be also chargeable under the Act. S....