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1 - 7 of 7 (0.65 seconds)Section 43 in The Income Tax Act, 1961 [Entire Act]
Section 6 in The Income Tax Act, 1961 [Entire Act]
The Commissioner Of Income-Tax, Bombay ... vs The Bombay Trust Corporation, Limited on 26 November, 1929
The assessess in the present case do not come under either of those categories. Then the third class is, "or through whom such person is in the receipt of any income, profits or gains". It is said that because the income on this debt is received by the Nizam from the assessees, the assessees are liable to be appointed as his agents. It was suggested by Sir Amberson Marten in Commissinor of Income-tax, Bombay v. Bombay Trust Corporation (1928) I.L.R. 52 Bom. 702, s.c. 30 Bom. L.R. 1172 that the words "through whom" in Section 43 have not the same meaning as the words " from whom", and he attached significance to the fact that " through" and not "from" was used. In that case this Court held that the agent within the meaning of Section 42 and Section 43 must be a person who received the profits on which the tax was to be charged, and certainly the fact that the Act confers no right on the agent who pays the tax of the non-resident to recover the amount of the tax from such non-resident would seem to afford a strong argument in favour of that view. But the Privy Council took a different view, and held that the agent need not be a person in receipt of the rents and profits. The report of the case is in 57 Indian Appeals at p. 49, and Lord Dunedin in dealing with the words of Section 43 describing the agent says, "Taking the words as they stand : the respondents have a business connection with the Hong Kong Company, and 'through them' the company is in receipt of profits or gains." So that he treats that case as one in which the agent came within both the second and the third categories, and there is no doubt whatever that on the facts of that case there was a business connection between the non-resident and the person appointed agent. But the question as to what was necessary in order to bring a person within the third category of agents in Section 43, that is a person through whom the nonresident is in receipt of income, was not decided, since in that case the person came certainly within the second category, and possibly also within the third category. Now I am not prepared to determine exactly what must be proved in order to bring an agent within that third category, but I am prepared to hold that it is necessary to prove that he is something more than a mere debtor. In this case Messrs. Currimbhoys are nothing but pure debtors of the Nizam of Hyderabad, That being so, I am prepared to hold that they are not persons who can be appointed agents within Section 43. If that is so, then they cannot be charged in respect of the Nizam's palace in Bombay, which is no doubt property in British India within the meaning of Section 42. I I think, therefore, that the actual questions propounded must all be answered in the negative. Costs of the assessees to be paid by the Commissioner, such costs to be taxed by the Taxing Master, Original Side, as on the original side scale.
Section 9 in The Income Tax Act, 1961 [Entire Act]
The Income Tax Act, 1961
Chunilal Omkarmal vs Chaturbhuj Piramal on 28 September, 1931
This contention I have examined whilst discussing Section 43. In my opinion the connection between the Nizam and the Currimbhoys was that between a creditor and a debtor and not a business connection. Then it is argued that the income arose from property in British India, namely, the debt. It is argued that the debt is situated in Bombay, and some reference was made by the learned Advocate General to a decision of this Court in which it was held that the situs of the debt was the residence of the debtor Chunilal v. Chaturbhuj, (1931) 34 Bom. L.R. 17. As far as I remember, that decision was confined to the facts of that particular case, and one fact was that the debt in that case was payable at Indore, and the debtor also resided in Indore. In this case the evidence is that the moneys were paid in Hyderabad and were repayable also there, Then it is difficult to see how the Nizam can be said to be the proprietor of the "debt" and can be said to possess property in Bombay because his debtor resides in Bombay. After the transaction was completed, the only right he has is to recover the moneys which he had lent. Assuming, therefore, that the Rs. 50 lakhs were kept intact in Bombay, it is difficult to see how the Nizam can be said to be the owner of it. Apart from that, I think, there is considerable force in the argument that property in Section 42 means immoveable property and not a mere debt or a chose in action. In Section 6, which deals with taxable income, the various heads of income chargeable to income-tax are bet out, one of them being property. Reading Sections 6 and 9 together the word "property" there only means immoveable property. There does not appear any satisfactory reason why the word should not be construed in the same sense under Section 42.
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