TMI Blog2002 (11) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000 is not included in view of the agreement between India and Malaysia. The working on page 24 of the paper book made by the Income-tax Officer shows that even the Income-tax Officer has proceeded to calculate the relief on country-wise basis and not on the basis of aggregation of income. - We, therefore, answer the above question in the affirmative, i.e., in favour of the assessee and against the Department. - - - - - Dated:- 22-11-2002 - Judge(s) : S. H. KAPADIA., J. P. DEVADHAR. JUDGMENT The judgment of the court was delivered by S.H. KAPADIA J.-All the above four references have come to this court under section 256(1) of the Income-tax Act, 1961, for the assessment years 1971-72, 1972-73, 1973-74, 1978-79, 1980-81 and 1981-8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal by the Department. The Tribunal took the view following its judgment of the earlier years that the DIT relief was admissible with reference to only that part of the total income of the assessee which has gone into the computation of the total income and consequently the losses incurred in the Thailand branch stood omitted. Being aggrieved, the Department has made the reference to this court under section 256(1) of the Act. Arguments: Mr. R.V. Desai, learned senior counsel for the Department, contended before us that in the present case the Tribunal has erred in relying upon the judgment of the Supreme Court in K.V.AL.M. Ramanathan Chettiar v. CIT [1973] 88 ITR 169. He contended that the judgment has no application to the facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thailand branch. In this connection, he relied upon the provisions of section 72 of the Income-tax Act. He contended that for computation of income, it was necessary to aggregate the income of the assessee from various branches all over India. He relied upon section 72 of the Income-tax Act and he contended that while computing the total income, the principle of carry forward and set off of business losses should be applied and, if so applied in this case, then the business losses of the Thailand branch should be set off against the business income of the branch at Tanzania and only the net foreign income should fall under section 91(1) for the purposes of calculating the DIT relief. Mr. Dastur, learned senior counsel appearing on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and against the Department. Findings: In the present matter, we are concerned with the scope of section 91(1) of the Act. The said section reads as follows: "91. (1) If any person who is resident in India in any previous year proves that, in respect of his income which accrued or arose during that previous year outside India (and which is not deemed to accrue or arise in India), he has paid in any country with which there is no agreement under section 90 for the relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian rate of tax or at the rate of tax of the other country whichever is less. Therefore, the relief under section 91(1) is by way of reduction of tax by deducting the tax paid abroad on such doubly taxed income from tax payable in India. Under the circumstances, the scheme is clear. The relief can be worked out only if it is implemented country wise. If the argument of the Department is to be accepted then, it would be impossible to compare the rate of tax of the foreign country with the rate under the Indian Income-tax Act. In this connection, a few examples may be seen. Firstly, if income arises in a country where there is no tax, the assessee would not be entitled to DIT relief because, the basis of the said relief is that there sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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