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TMI Blog1967 (1) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... een assessed in the status of an individual and as a resident and ordinarily resident. For the assessment year 1955-56, corresponding to the accounting year ended February 1, 1955, he was assessed on a total income which included Rs. 10,253 as foreign income after deducting the statutory allowance under the third proviso to section 4(1) of the Income-tax Act, 1922. The total foreign income consisted of Rs. 2,400 as salary and the balance as working share of the assessee's share of profits. In the firm of V. T. V. Dharmaperumal Pillai, the Income-tax Officer noticed that a sum of Rs. 15,000 had been credited to the assessee's personal account in the books of the Tuticorin branch of S. K. Kanagasabapathi Pillai and Company by debit to the Col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that this was not a case of mere book entries treated as remittance, but a clear-cut case of transfer of assets to India. It was of the view that, so far as this remittance was concerned, it was not different from a clear-cut case of transfer of a foreign bank account of an assessee to a branch of the bank in India. The Tribunal made its order on August 17, 1957, dismissing the assessee's appeal. On December 28, 1956, as is seen from the statement of the case submitted to this court, there was an order under section 35, the effect of which was the whole of Rs. 14,753 was treated as fully remitted and the statutory allowance that had been granted was withdrawn. It does not appear, in fact the Tribunal says so, that this fact was brought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, on the facts and in the circumstances of the case, the sum of Rs. 4,500, originally allowed as statutory deduction, was liable to be included in the total foreign income chargeable to tax ?" On that question, counsel for the assessee has first addressed himself to the point as to whether at all there was a remittance. On April 30, 1954, in the day book of S. K. Kanagasabapathi Pillai and Co., Colombo, there was a credit in favour of the assessee through V. T. V. Dharmaperumal and Company with a sum of Rs. 15,000. On the same day, there was a debit against V. T. V. in the name of S. K. Kanagasabapathi Pillai and Co. of a sum of Rs. 15,000. On January 31, 1955, a sum of Rs. 15,000 was debited in the Colombo day book of S. K. Kanagasab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a term of art. It is not merely where cash or value in kind physically passes or is transferred, there is a remittance. Even where there is transfer by credit entries in the books of account, and the credit entry so transferred is such that the person in whose favour it is made has a right to operate upon and draw the amount, there is remittance. Counsel for the revenue attempted to distinguish between actual remittance and constructive remittance. In the circumstances of this case, we need not go into this question. All that is necessary to say is that a transfer by book entries, without actual cash being handled, may as much result in remittance as by the physical transfer of cash. This proposition is supported by authority. Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire cash, and that is, in our opinion, a receipt. But we do not see how the receipt of Rs. 15,000 will, in any way, assist the revenue so far as the third proviso to section 4(1) is concerned. Section 4 is not a charging section. That only relates to computation of total income chargeable to tax. When the assessment, as we already mentioned, of the foreign income was admittedly on accrual basis, and this is not disputed by learned counsel for the revenue, we do not see how the receipt will enable the revenue to include it in the chargeable total foreign income. The revenue could only bring it to tax on the basis of receipt. But that is not the case here. The receipt, in the circumstances, will have only relevance in the context of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the third proviso. In the statement of the case, the Tribunal has stated that the assessee had a total taxed foreign income unremitted prior to the accounting year, amounting to Rs. 36,565 up to the assessment year 1954-55. If, therefore, there are two funds both representing foreign income, profits and gains, one of which has already suffered tax and the other has not and there was a remittance during the accounting year of a certain sum the source for which there is no indication, there is, in our opinion, a presumption that the remittance should have been from the fund which has already suffered tax. This presumption, as was pointed out in Meyyappa Chettiar v. Commissioner of Income-tax, is, no doubt, a rebuttable one. But no attem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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