TMI Blog1950 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 4(1) and Section 4A(c)( b) of the Income-tax Act are not ultra vires the Indian Legislature. The other two questions which remain to be considered by us are these:- (1) Whether on the facts and in the circumstances of the case Section 42(1) and (3) of the Act alone and not Section 4 of the Act have application to the income accruing or arising by reason of sales in British India of manufactured goods where the manufacturing process took place outside British India. The question as here stated has been the result of an agreed amendment of the question originally framed by the Appellate Tribunal, both the learned counsel for the revenue authority and the assessee having stated that the question may be raised i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the meaning of Section 4A(c)(b ) by reason of its income arising in British India in the year of account exceeding its income arising without British India. On that basis he assessed the company for the two assessment years 1942-43 as a resident in British India on the profits and gains which had accrued to the company both within and without British India under Section 4(1)(b)( i) and (ii) of the Act. The assessment was confirmed on appeal and by the Appellate Tribunal. Hence the present reference. The contention of Mr. O.T.G. Nambiar, the learned counsel for the assessee, is that the company is a non-resident company and the profits that have accrued or arisen to the company in British India must be determined by the process of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the result of operations, some of which are carried on in British India and some outside, is made applicable only to cases where the profits and gains of a business are deemed under this section to accrue or arise in British India. In other words, Section 42(3) of the Act applies only where Section 42(1) of the Act would apply. Under Section 4A(c)( b) it is the income arising in British India that has to be taken into account and profits and gains which are deemed to accrue or arise in British India do not enter into the computation. Therefore Section 42(1) and (3) do not override the provisions of Section 4A(c)( b) of the Act and for the purposes of the latter section, we have only to take into account profits arising in British India ..... X X X X Extracts X X X X X X X X Extracts X X X X
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