Tracing foreign profits through an overdraft account can still make remittances taxable as income received in British India.

A remittance from Saigon to British India through an overdrawn banking account was treated as receipt of foreign income under Section 4(2) of the Indian Income-tax Act, 1922, because the account had to be viewed as a whole. The foreign profits credited to the account were sufficient to cover the remittance, and later substantial profit credits showed that the amount brought into British India was ultimately traceable to those profits. The existence of an overdraft did not, by itself, convert the remittance into borrowed money or prevent it from being taxed as income received in British India.

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Issues: Whether a remittance of Rs. 10,000 from Saigon to British India through an overdrawn banking account was assessable as receipt of foreign income in British India under Section 4(2) of the Indian Income-tax Act, 1922, notwithstanding the existence of an overdraft and the assessee's claim that the remittance represented borrowed money.

Analysis: The remittance had to be examined with the banking account as a whole, and not as a detached withdrawal insulated from the subsequent credits and debits. The available foreign profits were more than sufficient to cover the remittance, and the account showed that the assessee continued to credit substantial profits into the same account after the remittance. On the true character of the transactions, the money brought into British India was ultimately traceable to the foreign income and not to capital merely because the account was overdrawn at the moment of remittance. The existence of an overdraft did not, by itself, prevent the remittance from being taxed as profits received in British India.

Conclusion: The remittance was properly assessed as receipt of foreign income in British India under Section 4(2) of the Indian Income-tax Act, 1922, and the contention that it was only borrowed money was rejected.

Ratio Decidendi: Where foreign profits are available and the account, viewed as a whole, shows that remittances are ultimately traceable to those profits, a remittance made through an overdraft account may still be treated as receipt of taxable foreign income in British India.

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