1993 (9) TMI 46 - HC - Income Tax

Summary

Issues Involved:
The judgment addresses the includibility of dividend and interest income accrued in Ceylon in the computation of the assessee's income under the Income-tax Act, 1961 for the assessment year 1975-76, considering the restrictions imposed by the Ceylon Government on remittance to India.

Controversy and Decision:
The assessee, an individual, contended that due to restrictions on remittance from Ceylon to India during the relevant assessment year, the dividend and interest income should not be included in his income computation. However, the court rejected this contention, citing section 5 of the Act which states that total income includes all income accrued or received in India or outside India. The court emphasized that despite restrictions, income accrued outside India falls within the scope of total income. Additionally, section 220(7) provides relief to assessees assessed on income from countries with remittance restrictions, exempting them from paying tax until the prohibition is lifted. Consequently, the court held that the entire dividend and interest income accrued in Ceylon is liable to be assessed in the assessee's hands for the assessment year 1975-76.

Conclusion:
The court answered the question against the assessee and in favor of the Revenue, emphasizing that the restrictions imposed by the Ceylon Government do not affect the inclusion of the dividend and interest income in the assessee's total income. No costs were awarded in this case.