9911796707
TMI Blog1962 (1) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ars, as Japan was under military occupation, but to a state organisation called Boeki-Cho (Board of Trade). To negotiate for orders and to handle its other affairs in Japan in connection therewith, the assessee firm engaged San-Ei Trading Co. Ltd., Tokyo, as its agents. The Japanese company was admittedly a " non-resident " company. Two agreements were entered into by the assessee firm and the Japanese company, the first for the quarter, July to September, 1948, during which period a commission of 4 per cent. on the gross sale proceeds was payable to the Japanese company, and the second, for an indefinite period, with the commission reduced to 2 per cent. During the years of account, the amount of commission due to the Japanese company wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur opinion, refer only to the situation more specifically provided for in section 4(1)(b) as sub-section (a) provides a general cover for both the immediately following sub-sections (b) and (c). Section 4(1)(a) cannot, therefore by itself add a new liability to non-residents, the extent of which is clearly delimited under section 4(1)(c) of the Act to only incomes that accrue to them within the taxable territories. To read any further in section 4(1)(a) will totally nullify the effects of section 4(1)(c) . Income that has accrued once abroad cannot by any means accrue again in India. If such income is later remitted to India and received by or on behalf of such non-residents in India such subsequent receipt cannot be chargeable under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , for all the purposes of the Act, the assessee in respect of such income-tax. The provisos to the section enable the application of section 18, and the tax may be recovered by deduction under that section and the agent or any person who apprehends that he may be assessed as such an agent is also enabled to retain out of the money payable to the non-resident person a sum equal to his estimated liability. The section thus creates a vicarious liability, in so far as the agent is concerned, for the tax which the non-resident has to pay; but as a safeguard for him, he is enabled to retain from the money he has to pay, a sum equal to his own liability in the event of his being treated as the assessee. Section 43 lays down who can be deemed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are deemed to be received in British India in such year by or on behalf of such person, or (b) if such person is resident in British India during such year,-- (1) accrue or arise or are deemed to accrue or arise to him in British India during such year, or (ii) accrue or arise to him without British India during such year, or (iii) having accrued or arisen to him without British India before the beginning of such year and after the 1st day of April, 1933, are brought into or received in British India by him during such year, or (c) if such person is not resident in British India during such year, accrue or arise or are deemed to accrue or arise to him in British India during such year. " The contention is that this income cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to a resident or a non-resident person." It was rightly pointed out by the High Court in the judgment under appeal that : " Actual or 'deemed receipt' of income in the taxable territories by or on behalf of a non-resident attracts tax under section 4(1)(a) even though the income may not be chargeable under section 4(1)(c) by reason of its having accrued or arisen outside. Receipt of income within the taxable territories by itself attracts tax whether the recipient is a resident or non-resident and whether the income accrued or arose within the taxable territories or outside. So much is plain on the language of section 4(1)(a) and (c)." In our opinion, clauses (a) and (c) of section 4(1) can be read disjunctively, and clause (a), w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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