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TMI Blog1953 (4) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances of the case the amount of ₹ 16,650 remitted by the Sanawad shop of the assessee to Upleta (both out of British India), by a draft from the Imperial Bank, Khandwa, can be included in the total income of the assessee for the assessment year 1944-45." The assessee firm Haji Mohammad Usman and Sons has its main place of business at Khandwa. It has also a branch at Sanawad and the partners reside in Upleta. Both Sanawad and Upleta were at the relevant time out of British India and formed part of Indian States. In the accounting year 1943-44 the firm made a profit of ₹ 27,760 in the branch at Sanawad. Out of this amount of profit, a sum of ₹ 16,650 was brought to Khandwa for being sent to Upleta via Bombay. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ril, 1933, are brought into or received in British India by him during such year. Section 14(2)(c)--The tax shall not be payable by an assessee in respect of any income, profits or gains accruing or arising to him within an Indian State, unless such income, profits or gains are received or deemed to be received in or are brought into British India in the previous year by or on behalf of the assessee, or are assessable under Section 42." (Underlining is ours). It is admitted that this is not a case of income etc. "received" in British India and unless the money can be said to be brought into British India, it would not be liable to assessment. The words "brought into" did not occur in the corresponding Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money was transferred by the Hyderabad branch of the Imperial Bank to the account of the assessee in the Patna branch. In all these cases, it is urged, although the money was transmitted to British India for permanent retention, it was not held to be liable to tax. However, this decision was reached on the ground that the money was actually received in a non-taxable territory and since it was already once received it could not be deemed to be further received in British India. It was further observed in Rai Bahadur Sundar Das v. Collector of Gujrat [1922] I.L.R. 3 Lah. 349 at page 355: "It seems to be that the word 'receive' implies two persons, namely, the person who receives and the person from whom he receives. A person ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby that company was to work the Pondicherry Railway as an integral part of its own line, and out of the receipts make certain payments to the appellant company in India in rupees. For each of the financial years 1925-26 and 1926- 27 the South Indian Company paid sums due under the agreement to their agent at Trichinopoly, who was also agent for the appellant company, admittedly, for certain purposes. Under instructions from the appellant company he calculated and paid to the French Colonial Government the sums due under the convention, and remitted the balance to the appellant company in London by a bank draft payable there." On these facts it was held that- "The sums paid by the South Indian Railway Company had been 'r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf." this view was followed by the Supreme Court in Turner Morrison & Co. Ltd. v. Commissioner of Income-tax, West Bengal [1953] 23 I.T.R. 152. These rulings, however, deal with the question whether the sums paid to the agent of the assessee company should be deemed to have been "received" in British India within the meaning of Section 4(1) of the Act. They also, therefore, do not deal with the question of the interpretation of the words "brought into" with which alone we are concerned in the case. The purpose for which money was brought into British India is not material for purposes of taxation under the Act if it initially accrued or arose as income, profits or gains. It is not disputed in the present case t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subjects is free, however apparently within the spirit of the law the case might otherwise appear to be. In other words, if there be admissible, in any statute what is called an equitable construction certainly such a construction is not admissible in a taxing statute where you should simply adhere to the words of the statute." Adverting to the words "from whatever source derived" occurring in Section 4(1) of the Act, it was observed by Iqbal Ahmad. J., in Lala Indra Sen, In re [1940] 8 I.T.R. 187 that "taxation under the Act is the rule, and exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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