TMI Blog1945 (3) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... t was entitled to an exemption of ₹ 4,500 in respect of this foreign income. The taxing authorities contended that the proviso did not apply. The Income-tax Tribunal rejected the contention of the taxing authorities. The following question is submitted for the Court's opinion :- Whether in the circumstances of the case it has been rightly held that the Western India Life Insurance Company Limited, which is a company resident in British India, is entitled to a deduction of ₹ 4,500 under the third proviso to Section 4 of the Income-tax Act? On behalf of the Commissioner it is contended before us that the scheme of Section 4 is first to divide the income in respect of a resident in British India into two parts : (1) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come which has accrued or arisen to him without British India, within a certain period, but is brought into or received in British India by him in the accounting year. Sub-section (c) is again material to be noticed. It deals with the case of a non-resident and provides that the income which has accrued or arisen or is deemed to have accrued or arisen to him in British India during such year shall be included in his assessment. It must be noticed that while the expression deemed to accrue or arise is found in Section 4(1)(b)( i) and Section 4(1)(c), it does not find a place in Section 4(1)(b)( ii). It should again be noticed that while amending Section 42 the Legislature has still retained the marginal note Non-residents against that se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 4(1)(c) taxation of that part of a non-resident's income, which is deemed to have arisen in British India, is contemplated. Again, the various expressions used in the first part of that paragraph of Section 42 appear inappropriate when considered in connection with a resident assessee. The income, in the contingencies mentioned there, ordinarily would arise or accrue in British India, and except by stretching one's imagination one cannot conceive of cases when those circumstances apply in respect of a resident in British India. Giving the words used in Section 42 their natural meaning, it seems to me that the whole of the first part of Section 42 applies to non-residents and is not intended to define the expression deemed to accr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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