JETHABHAI JAVERIBHAI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following question has been referred to us under s. 66 (1) of the IT Act for our decision: - - "Whether on the facts of this case the sum of Rs. 7,145, the commission earned by the non - resident, accrued or arose to him through or from a business connection in British India within the meaning of s. 42 of the IT Act -

(2.) SHRI Jethabhai Javeribhai is a resident of the Baroda State and is a non -resident for the purpose of the IT Act. He purchased in the Baroda State tobacco for Mohanlal Hargovind of Jubbulpore for the latter's ' bidi ' business. Mohanlal Hargovind paid him a commission of Rs. 7,145 at 1 per cent approximately of the total value of the goods purchased by the non -resident for him. On these facts the Tribunal took the view that the commission so earned was from a business connection in British India and was therefore assessable to tax under s. 42 of the Act.

(3.) SECTION 42 as made applicable to this case runs thus : - - "All income, profits or gains accruing or arising, whether directly or indirectly, through or from any business connection in British India, . . . . . . . . . . shall be deemed to be income accruing or arising within British India, and where the person entitled to the income, profits or gains is not resident in British India, shall be chargeable to Income -tax either in his name or in the name of his agent, and in the latter case such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such Income -tax."