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TMI Blog1924 (11) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... nch of the Imperial Bank of India, but was first paid to the Hyderabad branch of that Bank and from there transferred to the assessee's account at Patna is to be regarded as having been received at Hyderabad and not in British India. It will be convenient to deal with the second point first. 3. The assessee, Sir Ali Imam, according to the facts found, was offered and accepted the post of President of the Executive Council of H.E.H. the Nizam of Hyderabad for five years on a salary of ₹ 7,000 per month, His employment began on the 20th August, 1919. After serving for just over three years, namely, on the 4th September, 1922, he resigned his office. His resignation was accepted and he made over charge of his office on September 6th, 1922 to his successor. Subsequently, on the same day, the Nizam issued a Firman in the following words: As owing to certain seasons, Sir Ali Imam has asked to be relieved of his duties, I have accepted his resignation. I take this occasion to express my appreciation of the loyal devotion with which he has performed the duties of his high office during the past three years. 4. He then directs Sir Faridoon Mulk to act as his successor unt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions. On the same day the Patna branch wrote to Hyderabad forwarding a copy of the letter received requesting the money to be placed to the assessee's credit with the Hyderabad branch of the Bank. They added in that letter that no entry had been passed at the Patna Branch which I take to mean that the money had not been credited to Sir Ali Imam by any book entry at the Patna branch. About a fortnight later, on the 30th September, 1922, Sir Ali Imam wrote to the Agent of the Imperial Bank of India at Hyderabad to transfer the balance standing to his credit at their branch to his account with the Patna branch. On the 4th October, the Hyderabad branch instructed the Patna branch to place the sum in question to Sir Ali Imam's credit in Patna which was accordingly done. It is conceded by the Government Pleader on behalf of the Commissioner of Income Tax that salaries earned by a British subject outside British India are not ordinarily chargeable under the Indian Income Tax Act and it is not contended that the income earned by Sir Ali Imam as President of the Nizam's Executive Council before his resignation was taxable. Section 1 of the Act which limits the area to which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been received in British India within the meaning of Section 4, Sub-section (1). It should be stated, as would appear from the correspondence which has been printed with the record, and indeed it is not disputed, that at all material times the assessee as well as the Nizam had an account with the Hyderabad branch of the Imperial Bank of India although this fact is not specifically mentioned in the statement of the case. The opinion of the Commissioner of Income Tax is expressed thus: In my opinion the sum is taxable because it was really received by the assessee in British India on September 16th. The instructions of the Finance Member show the intention of the employer and the assessee's acknowledgment, signed at Patna, constitutes a receipt in British India, The effect of his instructions of September 16th was to transfer the amount back to Hyderabad; if he had not given these instructions, the amount would clearly have remained, at Patna. 10. This passage quoted from the case submitted is merely an expression of opinion. It is not conclusive as a finding of fact. The fact found in the earlier part of the case is that the sum was first paid to the Hyderabad branch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... knowledgment signed at Patna constitutes a receipt in British India. The written acknowledgment of receipt is undoubtedly evidence of the fact that the money has been received, but it is not conclusive. Such receipts are frequently demanded before actual payment of the money and there can be no question that in the present instance nothing was credited to the assessee in the books of the Patna branch of the Bank up to the time the acknowledgment was signed on the 16th September or at any subsequent time until after the money had been placed at the credit of the assessee in his account with the Hyderabad branch. The Commissioner has expressed the view that the effect of the instructions given by the assessee to the Patna branch of the Bank on the 16th September was to transfer the amount back to Hyderabad and that otherwise it would have remained at Patna. This argument appears to me, with due respect to the Commissioner, to be fallacious. There was nothing to transfer. The money had not been paid and no credit entry in favour of the assessee had been made in the books of the Patna branch of the Bank. The fact is, that sometime in September, the money was first credited to the accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is asked should, in my opinion, be in the negative with reference to the facts found in the case. The Petitioner is entitled to his costs including the costs incidental to printing the paper book. The hearing fee is assessed at ₹ 300. B.K. Mullick, J. 14. I agree. I think the reference must be decided in favour of the Petitioner on the ground that the income was neither received in British India nor was such as can be deemed to have been so received. If it be urged that it is sufficient that the money was brought into British India, the reply is that it is not permissible to base an argument on the English Acts and on the case of Gresham Life Assurance Society, Ltd. v. Bishop (1902) 4 A.C. 287. The Indian Act seems clearly to contemplate that income accruing outside British India shall not be taxable (1) unless it is received in British India or is deemed to accrue, or arise, or to be received in British India, or (2) unless it constitutes the profits and gains of a business received or brought into British India within the meaning of Section 4, Clause (2) of the Act. Whatever the English Law may be upon the subject, I think the Indian Act requires that the income earne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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