GRINDLAYS BANK LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The Tribunal has referred the following questions of law to this court at the instance of the assessee under Section 256(1) of the Income-tax Act, 1961 :

(2.) The facts narrated in the statement of case are as under :

(3.) Being aggrieved by the order of the Income-tax Officer, the assessee went up in appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner, however, dismissed the appeal. The assessee preferred a further appeal to the Tribunal. The assessee contended before the Tribunal that the provisions of Section 195 of the Income-tax Act would not be applicable to the present case because the non-resident had received incomes by way of interest directly from the assessee and, therefore, the assessee was an agent for the purpose of the Income-tax Act, Therefore, it was liable to pay income-tax on the interest credited to the accounts of non-residents as an agent and, consequently, Section 195 of the Income-tax Act was not at all applicable. The Tribunal rejected this contention.