TMI Blog1930 (12) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ct), upon the Remington Typewriter Company (Bombay), Limited, as agent for the Remington Typewriter Company of New York. This last-mentioned company is a company incorporated in the United States of America and carries on the business of manufacturing and selling the well-known Remington typewriting machine. These two Companies may be conveniently referred to as the Bombay Company and the American Company respectively. The assessments were made in respect of (1) dividends paid by two Indian Companies, viz., the Remington Typewriter Company (India), Limited and the Remington Typewriter Company (Madras), Limited, to the American Company in respect of its shareholding in the two Indian Companies, (2) dividends paid by the Bombay Company to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Cases ; in particular sections 40, 42 and 43. Section 40 deals with the case of a guardian, trustee or agent of any person being a minor, lunatic or idiot or residing out of British India being in receipt on behalf of such person of any income, profits or gains chargeable under the Act. Section 42 (1) deals with the case of profits and gains accruing or arising to a person residing out of British India directly or indirectly through, or from any business connection or property in British India. It provides that such profits and gains shall be deemed to be income accruing or arising within British India and that they shall be chargeable to income-tax in the name of the agent of any such person. Section 42 (2) deals with the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Remington Typewriter Company of New York from the Remington Typewriter Company (Bombay), Limited, the Remington Typewriter Company (India), Limited, and the Remington Typewriter Company (Madras) Limited, can under Section 42 (1) of the Act or otherwise be charged against and collected from an agent. 3.Whether the Remington Typewriter Company (Bombay) Limited, is or can be held to be the agent of the Remington Typewriter Company of New York under Section 43 of the Act. In answer to the reference, the High Court (Marten C. J. and Kemp J). on the 20th March, 1928, made the following order: - For the reasons stated in the accompanying Judgment the Court gives the following answers to the questions submitted to it. Questions I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and gains. In adopting this view, the High Court followed an opinion which they had already expressed in a previous reference made to them at the requirement of the Bombay Trust Corporation limited. See Bombay Trust Corporation Limited v. Commissioner of Income-tax, Bombay 3 ITC 135. In that case a Hongkong Company had advanced to the Bombay Trust Corporation, Limited, large sums on deposit at interest. The Corporation was assessed as agent of the Hongkong Company in respect of the payments of interest on the sums advanced. The High Court, while holding that the interest paid was a profit or gain accruing or arising to the Hongkong Company from a business connection in British India within section 42(1), also held that though the Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection existed was accordingly argued before the Board. As a result of that argument their Lordships feel no doubt that the answer given by the High Court to Question III was correct. The Bombay Company was formed for the express purpose of acquiring from the American Company and carrying on in a particular area the American Company's business of selling the American Company's manufactures. Although no contractual obligation exists by which the Bombay Company is compelled to purchase any of the manufactures of the American Company, the flow of business between the two Companies is secured by the fact that the ultimate and complete control of the Bombay Company is vested in the American Company which owns all its shares. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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