Law: Income Tax Act, 1922

Section: 2(14AA)

(a) Income Tax Act (XI of 1922)---S.2(14AA)---Assessment on the income accruing during the previous year ending on 31-12-1970 to an assessee in Bangladesh even though the same income had already been assessed in Pakistan was not justified. In the present case the assessee was a person and was a resident in the taxable territories for the previous year ending on 31-12-1970 as the control and management of the affairs of the assessee-company was situated wholly in Pakistan, which according to definition given in the Act was taxable territory as the previous year ended before March 26, 1971 on which date Bangladesh emerged as an independent State. Under section 4(1) of the Act the assessee was liable to be taxed for the income of the previous year which ended on 31-12-1970 as the total income of the assessee included all income, profit and gains from whatsoever source derived and the income accrued in Pakistan for the previous year was deemed to be income by fiction of law accrued in the taxable territory and was assessable for the assessment year 1971-72. Although the assessee-company was a resident in the taxable territory and income earned was subject to taxation as enjoined under section 4(1) of the Act, 1922 yet it was not correct that the DCT was justified in making the assessment on the income of the assessee of the previous year ending on 31-12-1970. An income if taxed once 4t the hand of one person, the same income cannot be taxed again at the hand of .the said person. If that is done, it tantamount to double taxation which is not conceived in taxing statute. The assessee in the present case had already been taxed for the income of the previous year ending on 31st December, 1970 in Pakistan. Therefore where an income of an assessee had already been taxed, the same income again cannot be taxed in the taxable territory on the ground that the assessee is resident in the taxable territory namely Bangladesh. Imperial Tobacco Company of India Ltd. v. CIT PLD 1958 SC 125; CIT v. Express Newspapers Ltd. 40 ITR 38 and RKB Motors and Timber (P) Ltd. v. CIT 1968 ITR 794 distinguished. Inland Revenue v. Sanderson 8 TC 38 ref. (b) Income-tax--- ----Circular by…

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