TMI Blog1961 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... n certain questions. That statement of case has now been drawn up by the Tribunal and sent to this court. The matter is now ready for decision. This is an appeal by the Commissioner of Income-tax, Bombay, against the judgment of the High Court at Bombay given on a reference under section 66(2) of the Income-tax Act answering the question referred, in the negative. That question was, " whether, in any event, on the facts found by the Tribunal, there was any remittance by the petitioner to Bombay within the meaning of and assessable under section 4(1)(b)(iii) of the Income-tax Act." The assessment year concerned was 1948-49, the accounting year being 2003 Samvat. The facts found may now be stated. At the relevant time, Bhavnagar was a ruling State and therefore outside British India. There was a mill there which we shall, for brevity, call the Bhavnagar mills. The assessee and his brother Gordbandas had large sums in deposit with the Bhavnagar mills. These sums were profits earlier earned by the assessee and his brother in Bhavnagar. The amounts deposited belonged to the assessee and his brother in equal shares. The Bhavnagar mills kept an account of these deposits. This accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... que by the Bombay mills drawn in its favour by the Bhavnagar mills did not amount to receipt of moneys by the respondent, as soon as the Bombay mills credited the amount of it to the respondent, there was notionally a receipt of the money by the assessee and an advance of it by him to the Bombay mills to create the debt. The learned advocate for the assessee said in answer to this contention that there was nothing to show that the agreement for the advance of the money by the assessee to the Bombay mills had not been made at Bhavnagar. He also said that there was nothing to show as to how the money or the cheque came from Bhavnagar to Bombay and that it might have been that it was agreed between the assessee and the Bombay mills at Bhavnagar that the money would be deposited in the Bombay mills to the credit of the assessee and the cheque or the money might have been delivered to the Bombay mills or its agent at Bhavnagar. His contention was that if such was the case--and on the evidence it could not be said that it was not then the notional receipt of the money by the assessee and its advance by him to the Bombay mills, if any, would have taken place in Bhavnagar and when the mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with it in the sum of Rs. 1 lakh as having been paid to Harkison Ratilal and Dilipkumar Trikamlal. This entry was actually made a little later, namely, on April 7, 1947. The facts now found would show that nothing had been done at Bhavnagar. It was also found that as the Bombay mills needed moneys and the assessee had money with the Bhavnagar mills, he utilised these latter moneys for an advance being made by him out of it to the Bombay mills. As will appear from our earlier order hereinbefore set out, none of the points arising in the appeal had been decided by us on that occasion. The question that we have to decide is whether on these facts it can be said that income had been brought into or received in Bombay by the assessee. The relevant portion of the section is in these terms : " 4. (1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which-- (a) are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or (b) if such person is resident in the taxable territories during such year,-- (i) accrue or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or arising in the previous year has already been received outside the taxable territories it cannot be said to be received again as such in the taxable territories, if it is brought from the place where it was received as such into the taxable territories. The second part which is clause (b) deals with the case of a person who is a resident in the taxable territories during such year. In his case all income which accrues or arises or is deemed to accrue or arise to him in the taxable territories during such year is chargeable to income-tax ; besides, all income etc. which accrues or arises to him without the taxable territories during such year is also chargeable to income-tax. Then comes the part with which we are directly concerned and which provides that all income etc. which having accrued or arisen to such person without the taxable territories before the beginning of such year and after the first day of April, 1933, is brought into or received in the taxable territories by hime during such year will be chargeable to income-tax. This is a special provision relating to income etc. which has accrued or arisen not in the previous year but in years previous to that though a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m without the taxable territories and that it is possible that though the income etc. might have accrued long ago it might not have been received even outside the taxable territories. This is theoretically possible ; but in our opinion it is clear that when clause (b)(iii) speaks of income etc. having accrued or arisen without the taxable territories it is implicit in it further that such income etc. having accrued or arisen without the taxable territories had already been received there. Considering that clause (b)(iii) applies to all income having accrued or arisen after the first day of April, 1933, (that is more than 27 years ago now) it does not seem reasonable to hold that the words " having accrued or arisen " used in that clause have no reference to its receipt also outside the taxable territories. It seems to us therefore that what clause (b)(iii) provides is that if any income etc. had arisen or accrued outside the taxable territories and had been received there sometime before the previous year and if such income, etc., is brought into or received in the taxable territories by such person in the previous year it will be liable to be charged under section 3. In the circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble territories during the previous year. The statement of the case shows that this sum was income etc. of the respondent which accrued to him outside the taxable territories and had been received by him there and deposited in the Bhavnagar mills in his account. It is also clear from the facts which we have set out already that this money which was lying to the credit of the respondent in the Bhavnagar mills was received by him by means of a cheque on the Bank of India Ltd., Bombay, in which the Bhavnagar mills had an account and on which the respondent had the authority to draw. Having thus drawn the money by a cheque on the said bank, the respondent advanced it to the Bombay mills and the cheque was cashed by the Bombay mills and the money was credited into the account of the respondent's benamidars in the Bombay mills. There was thus clearly receipt in the previous year of income etc., which had accrued to the respondent outside the taxable territories before the previous year and he would therefore be chargeable under section 3 of the Act with respect to the amount. The High Court has held that the income would be taxable only when brought into or received in the taxable ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dilipkumar Trikamlal. The Bhavnagar concern, in its turn, a few days later debited the account that the assessee had with it in respect of the depctsits, with the amount of the cheque as moneys paid to these two persons. These two persons however were only benamidars for the assessee. The transactions, therefore, showed that the assessee had withdrawn the money from the concern at Bhavnagar out of its accumulated income and advanced it to the concern in Bombay. The Tribunal found it as a fact that the assessee had utilised in Bombay his income lying at Bhavnagar for making an advance in Bombay. These transactions took place in April, 1947. I have simplified the facts a little for clarity. Actually the account in the concern at Bhavnagar was in the joint names of the assessee and his brother and the advance to the concern in Bombay was really in their joint names. The assessee's share was half of the amount of the cheque and with that share alone we are concerned in this case. On these farts half the amount of the cheque as representing the assessee's share of the accum ulated income, was included in his total income, for assessment to income-tax for the year 1948-49 under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with the Act as it then stood, in Board of Revenue v. Ripon Press, namely, " that you cannot receive the same sum of money qua income twice over, once outside British India and once inside it ", expresses the inherent nature of receipt of income and still holds good and unless the context compels a different meaning, which I do not find the present context to do, income can be received only once. As, in the present case, it seems fairly clear that the assessee had received the inccme in Bhavnagar, I do not think he can be, taxed on it on the basis that he " received " it in Bombay over again. If, however, the assessee did not " receive " the income in Bombay, it seems clear to me that he " brought into " Bombay that income. He got in Bombay an amount which he had earlier received in Bhavnagar as income, for he advanced it to a concern in Bombay and this he could not do if he had not got it. The getting of the income in Bombay may not have been the receipt of it but how could he get it if he did not bring it in ? After the assessee received the income in Bhavnagar, it remained all the time under his control and that is why he could not receive it again : see Sundar Das v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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