Deemed income from business connexion in British India was taxable; agent assessment was only a collection mechanism.

Income accruing or arising in British India, including profits deemed to accrue through a business connexion under Section 33(1), was held taxable under the Act. The court treated the provision allowing charge in the name of an agent as a collection mechanism only, not a precedent to liability. On the facts, the petitioner carried on substantial business in British Cochin, contracts were made and performed there, and sale proceeds were received in British India, bringing the profits within the charging provisions. The objection that assessment had to be made first in the name of an agent was therefore not open at that stage, and the income was assessable under the Act.

---

---

Issues: Whether the petitioner's profits and gains arising through business connexions in British India were taxable and assessable under the Act, and whether assessment in the name of an agent was a condition precedent to tax liability.

Analysis: Income is taxable under Section 3 when it accrues or arises in British India or is deemed so to accrue or arise. Section 33(1) deems profits or gains of a person residing out of British India, arising directly or indirectly through or from any business connexion in British India, to be income accruing or arising in British India. The provision that such income may be charged in the name of an agent is machinery for collection and does not limit the charge itself. On the facts found, the petitioner carried on substantial business in British Cochin, contracts were made and performed there, and sale proceeds were received in British India, bringing the profits within the charging provisions. The additional objection as to the proper collector was not open to be raised at that stage.

Conclusion: The petitioner's income was rightly held assessable under the Act, and assessment was not dependent on prior assessment in the name of an agent.

---