Physical bringing of income into British India triggers tax charge under the 1922 Income-tax Act

The article explains that under the Income-tax Act, 1922, income accruing outside British India could be taxed when money representing that income was physically brought into British India by a resident assessee. The phrase "brought into" was treated as distinct from "received" and was given its plain meaning: the act of bringing money into British India. No additional requirement of permanent retention, investment, or a particular intended use was read into the charging provision. On that construction, remittance of profits through British India into another place outside British India fell within the tax charge once the money entered British India.

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Issues: Whether profits accrued in an Indian State and remitted through British India to another place outside British India could be included in the assessee's total income for the relevant assessment year as income brought into British India.

Analysis: The governing provisions were Section 4(1)(b)(iii) and Section 14(2)(c) of the Income-tax Act, 1922, which taxed income accruing outside British India if it was brought into or received in British India by a resident assessee. The expression "received" was not in issue on the facts; the real question was the meaning of "brought into". Earlier authorities dealing with "received" were held not to control this expression. The Court held that the words "brought into" denote the physical act of bringing money into British India and do not carry any implied requirement of permanent retention, investment, or a particular purpose. In fiscal enactments, the statute must be applied according to its plain words, and if money representing income, profits or gains is brought into any part of British India, it falls within the charge to tax.

Conclusion: The amount remitted from the Sanawad shop and brought through Khandwa into British India was includible in the assessee's total income for the assessment year 1944-45, and the reference was answered in favour of the Revenue.

Ratio Decidendi: For purposes of the Income-tax Act, 1922, money representing income, profits or gains becomes taxable once it is physically brought into British India, and the charging provision is not confined by any requirement of permanent retention or intended use.

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