Indirect receipt of non-resident income can make a family member an agent under section 163(1)(c) for tax purposes.

A person from or through whom a non-resident receives income, directly or indirectly, can be treated as an agent under section 163(1)(c) of the Income-tax Act, 1961. Income arising from the non-resident son's agricultural land was not physically paid over to him, but was used by the father for household expenses. That utilisation was held to amount to indirect receipt by the non-resident, bringing the father within the statutory definition of agent for tax purposes.

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Issues: Whether, on the facts and circumstances, the father of a non-resident assessee could be treated as an agent under clause (c) of section 163(1) of the Income-tax Act, 1961 on the footing that he utilised the income arising from the non-resident's agricultural land.

Analysis: Clause (c) of section 163(1) covers a person from or through whom the non-resident is in receipt of income, whether directly or indirectly. The income from the agricultural land belonged to the non-resident son. Though the income was not physically paid over to him, it was utilised by the father for household expenses, and that utilisation amounted to indirect receipt of the income by the non-resident within the meaning of the provision.

Conclusion: The father was covered by section 163(1)(c) as the agent of the non-resident assessee.

Ratio Decidendi: Where income belonging to a non-resident is enjoyed or utilised through another person, such enjoyment constitutes indirect receipt of income for the purposes of section 163(1)(c) of the Income-tax Act, 1961.

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