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The Anglo-French Textile Co. Ltd. By ... vs The Commissioner Of Income-Tax on 18 January, 1950 cites

The Commissioner Of Income-Tax, Bombay ... vs The Western India Life Insurance ... on 21 October, 1948

The Bombay case has therefore no bearing on the present question. For these reasons we answer the first question referred to us in the affirmative and against the assessee. It follows from our answer to the first question that a portion of the profits, that is to say, such portion as the Income-tax Officer thinks just and reasonable in the circumstances of the case, is attributable to the purchase of cotton made in British India by the agents of the assessee and such profits could be apportioned under Section 42 (3) of the Act. The second question is also answered in the affirmative and against the assessee. The assessee having failed will pay the Commissioner of Income-tax his costs which we fix at Rs. 250.
Bombay High Court Cites 5 - Cited by 12 - Full Document

Commissioner Of Income-Tax vs The Little'S Oriental Balm And ... on 14 December, 1949

185 : (224 I. C. 81) which was taken up on appeal to the Privy Council in Commr. of Income-tax, Bombay v. Western India Life Assurance Co., 1949-17 I. T. R. 125 : A. I. R. (36) 1949 P C. 97) we have considered the scope and effect of Sections 42 (1) and 42 (3) in our judgments in Commr. of Income-tax, Madras v. Littles Oriental Balm and Pharmaceuticals Ltd., R. C. No. 57 of 1946 : and Bangalore Woollen Cotton and Silk Mills Co. Ltd. v. Commr. of Income-tax, Madras, R. O. No. 68 of 1916 : both with reference to the legislative history of these provisions and the decisions that have been rendered on the language of Section 42 (1) and the corresponding Section 33 (1), Income-tax Act of 1918. It is unnecessary to repeat here the considerations which led us to the opinion that Sections 42 (1) and 42 (3) would be applicable to cases like the present. Suffice it to say that an isolated transaction between a non-resident and a resident in British India without any course of dealings such as might fairly be described as a business connection, does not attract the operation of Section 42. To constitute a business connection some continuity of relationship between the person in British India who helps to make the profits and the person outside British India who receives or realises the profits is requisite. There is no definition of the words "business connection" and its import is only to be gathered from the context as well as the previous decisions on this topic. It may be that where all that is known is that a few transactions of purchases of raw materials have taken place in British India and the manufacture and sale of goods have taken place outside British India, the profits arising from such sale cannot be considered to have arisen out of a business connection in British India. Where, however, as in this case there is a regular agency established in British India for the purchase of the entire raw materials required for the purpose of manufacture abroad and the agent is chosen by reason of his skill, reputation and experience in the line of trade it can be held that there is a business connection in British India.
Madras High Court Cites 44 - Cited by 15 - Full Document

Banglore Woollen, Cotton And Silk Mills ... vs Commissioner Of Income-Tax on 8 December, 1949

185 : (224 I. C. 81) which was taken up on appeal to the Privy Council in Commr. of Income-tax, Bombay v. Western India Life Assurance Co., 1949-17 I. T. R. 125 : A. I. R. (36) 1949 P C. 97) we have considered the scope and effect of Sections 42 (1) and 42 (3) in our judgments in Commr. of Income-tax, Madras v. Littles Oriental Balm and Pharmaceuticals Ltd., R. C. No. 57 of 1946 : and Bangalore Woollen Cotton and Silk Mills Co. Ltd. v. Commr. of Income-tax, Madras, R. O. No. 68 of 1916 : both with reference to the legislative history of these provisions and the decisions that have been rendered on the language of Section 42 (1) and the corresponding Section 33 (1), Income-tax Act of 1918. It is unnecessary to repeat here the considerations which led us to the opinion that Sections 42 (1) and 42 (3) would be applicable to cases like the present. Suffice it to say that an isolated transaction between a non-resident and a resident in British India without any course of dealings such as might fairly be described as a business connection, does not attract the operation of Section 42. To constitute a business connection some continuity of relationship between the person in British India who helps to make the profits and the person outside British India who receives or realises the profits is requisite. There is no definition of the words "business connection" and its import is only to be gathered from the context as well as the previous decisions on this topic. It may be that where all that is known is that a few transactions of purchases of raw materials have taken place in British India and the manufacture and sale of goods have taken place outside British India, the profits arising from such sale cannot be considered to have arisen out of a business connection in British India. Where, however, as in this case there is a regular agency established in British India for the purchase of the entire raw materials required for the purpose of manufacture abroad and the agent is chosen by reason of his skill, reputation and experience in the line of trade it can be held that there is a business connection in British India.
Madras High Court Cites 27 - Cited by 21 - Full Document

Sudalaimani Nadar vs Commissioner Of Income-Tax, Madras. on 24 September, 1940

and Sudalaimani Nadar's case, 1941-1 M.L.J. 99 : (A.i.r. (28) 1941 Mad. 229 S B.) do not support his contention because in those cases there was no regular agency established in British India for carrying out the transaction of purchase of goods which were exported abroad. We have expressed the view in our judgments in R. C. Nos. 57 and 58 of 1946: (A. I. R. (38) 1961 Mad.
Madras High Court Cites 3 - Cited by 3 - Full Document

The Commissioner Of Income-Tax vs Siddareddy Venkatasubba Reddy And ... on 3 September, 1948

34) and Commr. of Income-tax v. Steel Bros. & Co., 3 Rang. 614 : (A. I. R. (13) 1926 Rang. 97 F. B.). Section 42 proceeds on the basis that where there is such a business connection the operations carried on in British India have given added value to things which are manufactured and marketed abroad and such additional value is embedded in the marketable goods and takes shape when the sales of these goods are effected abroad. It can no longer now be maintained that Section 42 of the Act is a mere machinery section. It has the effect of rendering persons liable to tax on profits which do not accrue or arise or are not received in British India but which are deemed to be such profits by virtue of the section.
Madras High Court Cites 5 - Cited by 4 - Full Document
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