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TMI Blog1953 (9) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... xecuted promissory notes in their favour. On this very day, i.e., 3rd April, 1947, when the promissory note was executed by Harkison Ratilal and Dilipkumar Trikamlal, in the books of account of the Mahalaxmi Silk Mills Ltd., Bhavnagar, the sum of ₹ 1,00,000 was debited to the assessee and his brother and on the same day the New Mahalaxmi Silk Mills Ltd. in Bombay credited this sum of ₹ 1,00,000 in the name of Harkison Ratilal and Dilipkumar Trikamlal. Therefore in appearance the transaction was this that the assessee and his brother lent and advanced the sum of ₹ 1,00,000 to Harkison Ratilal and Dilipkumar Trikamlal from the moneys which they had in Bhavnagar and Harkison Ratilal and Dilipkumar Trikamlal in their turn adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been often considered and in this connection we must look at Section 4(1)(a) and Section 4(1)(b)(iii ). Section 4(1)(a) subjects to tax moneys actually received or deemed to be received in the previous year either by the assessee or on behalf of the assessee. Clause (iii) of Section 4(1)(b) subjects to tax income which has accrued in the past years and which has been accumulated in . the Indian States and which is remitted within the taxable territories in the year of account. Therefore, clause (iii) subjects to tax income on the remittance basis. Although it may have accrued or arisen in the past, the liability to tax is not on the ground that the income has accrued or arisen to the assessee, but that the assessee has brought it or receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable territories. It may be indirect or it may be constructive. We would have been very much inclined to accept that construction but for the fact that the Legislature, with the knowledge that it has made indirect or constructive receipt taxable under Section 4(1)(a), has departed from the language used in clause (a) and has deliberately made only direct bringing into or receiving by the assessee taxable when it comes to the income which falls under Section 4(1)(b)( iii). It is again in Section 14(2)(c) when the Legislature is dealing with income which has accrued in an Indian State and which has been brought into taxable territories in the same year, it states that the receipt need not be direct but it can be constructive or indirect. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at this transaction from a different point of view. The assessee had a sum of ₹ 50,000 lying as deposit with the Bhavnagar Mills. Instead of that amount lying as deposit with the Bhavnagar Mills on the 3rd of April, 1947, it lay as deposit with the Bombay Mills. Therefore, instead of the deposit being in Bhavnagar, the deposit was in Bombay. But again it cannot be said that the assessee has received this amount or has brought it into the taxable territories. We may again look at it from a third point of view. Before the 3rd of April, 1947, the assessee's debtor was the Bhavnagar Mills ; on the 3rd of April, 1947, his debtor became the Bombay Mills. So the result of the transaction was that one debtor was substituted for another, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very possibly, did not want to tax accumulated income which was not subsequently used by the assessee, but which he disposed of in favour of others who had the right of disposal over that amount. But whatever that may be, in a taxing statute when the Legislature has used language which in a particular case subjects the assessee to tax and in another case does not subject him to tax, we cannot possibly construe the section against the assessee and hold in favour of the department that the different language used by the Legislature must mean the same thing although obviously and patently they mean entirely different things. It may be pointed out that the finding of the Tribunal itself in the order which it passed is that there have been re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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