COMMISSIONER OF INCOME TAX Vs. PARASURAM JETHANAND

JUDGEMENT

(1.) THE question that has been referred to us is as follows:

(2.) THE question turns upon the proper interpretation of Section 42 (1), Income-tax Act, as it now stands. THE contention of the assessee is that having regard to the terms of Section 42 (1), it could possibly have no application to the case of a resident in British India, while the revenue authority maintains the contrary. THE language of Section 42 (1) as it now stands after several amendments, as well as its previous legislative history, would indicate, in our opinion, that it applies to residents, though having regard to the several categories of income specified in the section, its application to the case of residents must be rare. It may be conceded that the large majority of persona falling within Section 42 (1) would be non-residents. Extensive changes were made in Sub-sections (1) and (2) of Section 42 by the Amending Act of 1939. Before the amendment of 1939, Section 42 (1) ran as follows: