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TMI Blog1984 (9) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... ish passport and is not a citizen of India. The assessee left India in 1943 for East Kenya and served with the East African Railways till his retirement in 1963. Thereafter, he came back to India. The assessee received pension of Rs. 28,884 and Rs. 34,680, respectively, for the two years under consideration for the services rendered with the East African Railways from the British Government, which was received by him from the Ministry of Overseas Development, London, through their Crown agents in London. 4. In his returns of income as well as at the time of assessment proceedings, the assessee claimed that the pension received by him was exempt from tax. The ITO, however, framed the assessments with the remarks "as discussed in the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Madras High Court in B.R. Sundaram v. CIT [1979] 117 ITR 960. In that case, the assessee, a resident of Madras, was a pensioner of Malaysian Government. His claim was that his pension was not taxable in India as the pension had been received in Malaysia. This contention was rejected by the High Court which held that the same is taxable in India as the ingredients of section 5(1)(c) are satisfied. I, therefore, hold that the ITO was justified in bringing to tax the pension income of the appellant. " 5. Being aggrieved by the order of the AAC, the assessee has come up in appeal before the Tribunal. The learned counsel for the assessee submitted that the AAC has failed to appreciate the true intent and purpose of the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iderable force in the submissions made on behalf of the assessee. From the material already brought on the record, it is quite clear that the pension was first received in London and thereafter, it was remitted to the assessee. It is in this background, we have to see the true intent and purpose of the circular dated 20-2-1969 issued by the CBDT. We, therefore, reproduce the said circular : " Under section 9(1)(iii), pension accruing abroad is taxable in India only if it is earned in India. Pensions received in India from abroad by pensioners residing in this country, for past services rendered in the foreign countries, will be income accruing to the pensioners abroad, and will not, therefore, be liable to tax in India on the basis of accr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o accrue or arise to him in India during such year ; or (c) accrues or arises to him outside India during such year: Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6) of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India. " It is quite clear from the proviso to sub-section (1) of section 5, that the income which accrues or arises to a person outside India is not to be included in the total income of the said person unless it is derived from a business controlled in or a profession set up in India. In this background, we entirely agree with the submissions m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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