Bank drafts brought into India counted as imported income, making the amount taxable when carried in, not when encashed.

Income represented by bank drafts was treated as brought into the taxable territories when the assessee carried the drafts into India, because a bank draft is a negotiable instrument conveying the underlying funds for the charging provision. The later encashment did not postpone taxability, since it related back to the earlier import of the drafts. On that basis, the amount fell within section 4(1)(b)(iii) of the Income-tax Act, 1922, and was taxable in assessment year 1948-49.

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Issues: Whether the amount represented by the two drafts was brought into the taxable territories when the assessee entered India with the drafts or only when the drafts were encashed, and whether such amount was taxable in the assessment year 1948-49 under section 4(1)(b)(iii) of the Income-tax Act, 1922.

Analysis: Section 4(1)(b)(iii) contemplates income that had accrued or arisen outside the taxable territories and is later brought into or received in the taxable territories during the relevant year. The distinction between mere receipt and bringing in was examined in the light of the nature of a bank draft, which is a negotiable instrument and a convenient mode of transmitting funds. On the reasoning adopted, the drafts represented the money itself for the purpose of the charging provision, and the relevant event was the assessee's entry into India carrying the drafts, not the later cashing of the drafts. The subsequent encashment related back to the receipt of the drafts.

Conclusion: The amount was brought into the taxable territories when the assessee entered India with the drafts, and it was taxable in the assessment year 1948-49. The reference was answered in the affirmative, against the assessee.

Final Conclusion: The income embodied in the drafts was treated as imported into India upon their physical carriage by the assessee, so the charging provision applied in the earlier assessment year rather than being postponed until encashment.

Ratio Decidendi: For purposes of section 4(1)(b)(iii) of the Income-tax Act, 1922, income represented by a bank draft is brought into the taxable territories when the draft is carried into India, and encashment thereafter does not defer taxability to the year of encashment.

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