TMI Blog1988 (12) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ate to the Indian income and foreign income ? (2) Whether, on the facts and in the circumstances of the case and since no adjustments of refunds were made, the proportionate tax on the foreign income which is to be kept in abeyance in each one of the two years in respect of the three assessees is payable only when the prohibition or restriction from the foreign country is removed and that any refund due to the assessee in these two years by virtue of excess payments against Indian income cannot be adjusted with reference to the tax kept in abeyance?" The assessees are individuals, The assessment years involved are 1959-60 and 1960-61. They have been partners in the firm styled Damodar Anandji which had income from business in India and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al authorities. On further appeal, the Tribunal accepted the claim. It is submitted before us by Dr. Balasubramanian, learned counsel for the Department, that the Tribunal did not appreciate the purport and the scope of section 91(1) of the Income-tax Act, 1961, correctly. The plain meaning of the provision was stated to be that the double income-tax relief was in respect of the foreign income and the provisions for not treating the assessees as in default under section 220(7) were also in respect of tax due on foreign income and that, therefore, the provisions of section 220(7) would operate in respect of tax due as reduced by the amount of double income-tax relief In support of his contention, Dr. Balasubramanian placed reliance on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer shall not treat the assessee as in default in respect of that part of, the tax which is due in respect of that amount which, by reason of such prohibition or restriction, cannot be brought into India, and he will continue to treat such an assessee as not in default in respect of that part of the tax until the prohibition or restriction is removed. There is no dispute that, in the first instance, tax is computed on the assessee's total world income and the tax due in respect of foreign income would not be the amount that represents the difference between the tax that will be payable by the assessee on his Indian income treating it as total world income and the tax payable on the total world income. It would be an amount computed by appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issues in the two cases have been different from the one before us. Having regard to the plain meaning of section 91 (1), we are inclined to hold that the Tribunal was justified in holding that the double income-tax relief should be apportioned proportionately between the foreign income and Indian income so as to arrive at the net tax due on foreign income in respect of which the assessee cannot be held to be in default within the meaning of section 220(7) of the Act. The second question arises thus The assessee had made payments of advance tax. The tax paid in advance and the tax deducted at source taken together was found to be in excess of the tax payable by the assessee in respect of his Indian income. For the tax due in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal. We have carefully gone through the provisions of section 220(7). The provision reads thus : "220 .(7) Where an assessee has been assessed in respect of income arising outside India in a country the laws of which prohibit or restrict the remittance of money to India, the Income-tax Officer shall not treat the assessee as in default in respect of that part of the tax which is due in respect of that amount of his income which, by reason of such prohibition or restriction, cannot be brought into India, and shall continue to treat the assessee as not in default in respect of such part of the tax until the prohibition or restriction is removed." It is evident that an assessee cannot be treated as an assessee in default in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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