Law:

Section:

Section 5 of the Income-tax Act, 1961 [Corresponding to section 4 of the Indian Income-tax Act, 1922] - Income - Accrual of - Assessment year 1952-53 - Assessee purchased a motor car abroad and also a radio which was fitted into car - Subsequent, he brought car with radio to India - Whether cost of car and radio purchased out of foreign profits and brought into taxable territories could not constitute remittance of foreign profits within meaning of section 4(1)(b)(iii) of 1922 Act - Held, yes FACTS The assessee had purchased a motor car in Singapore, and also purchased a radio which was fitted into the car. The assessee brought the car with the radio to India. In the assessment year the Department held that the assessee had brought this sum as a remittance into the taxable territory. The appeal to the Assistant Commissioner failed. The further appeal to the Tribunal also failed. On reference : HELD What the assessee did was to spend a part of the profits that had accrued to him and had been received by him abroad for the purchase of a car which he brought over to India, obviously for his use. It was not suggested that he brought the car with the idea of selling it, and that it was a device resorted by him for bringing in money or money's worth. The fact that the assessee debited his headquarter account with the cost of the car really did not affect the position in answering the question, whether there was a remittance, or rather, whether money's worth was brought into India. There was no remittance. It was not money or money's worth that the assessee brought into the taxable territories when he brought the car which he had purchased abroad for his use in the taxable territories. Consequently, it was to be held that the cost of the car and radio purchased out of foreign profits and brought into the taxable territories could not constitute remittance of foreign profits within meaning of section 4(1)(b)(iii ) of 1922 Act. Note : Decision was in favour of assessee. CASE REVIEW Commissioner of Income-tax v. Ahmedabad Advance Mills Ltd. [1940] 8 ITR 95followedand relied upon. CASES REFERRED TO CIT v. Ahmedabad Advance Mills Ltd. [1940] 8 ITR 95 (PC) and Gresham Life…

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