Double taxation abatement must be computed only on the foreign assessment covered by the treaty, not unrelated U.K. tax relief.

Under the double taxation agreement with Pakistan, abatement had to be computed strictly on the basis of the foreign assessment certificate and the Pakistan assessment, with the Income-tax Officer limited to adjusting the uncollected demand accordingly. The computation could not be widened to include double income-tax relief already granted on U.K. income, whether as to income amount or relief rate. The Commissioner's revisional direction requiring a comprehensive recomputation was therefore based on an erroneous approach and was set aside, with the substantive issue decided in favour of the assessee and against the Revenue.

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Issues: Whether the Commissioner could revise the Income-tax Officer's order by requiring a comprehensive recomputation of the Pakistan abatement so as to take into account the allowance of double income-tax relief on U.K. income.

Analysis: Under the relevant agreement for avoidance of double taxation with Pakistan, the assessment in India and the rate of tax under the Finance Act remained unaffected. The only function of the Income-tax Officer, once the assessee produced the necessary foreign assessment certificate, was to determine the abatement on the basis of the Pakistan assessment and adjust the uncollected demand accordingly. The agreement did not permit introduction into that computation of matters relating to U.K. double tax relief, either as to the amount of income or the applicable rate of relief. The Commissioner's revisional approach, therefore, proceeded on an erroneous basis.

Conclusion: The Commissioner's order was rightly set aside and the answer to the substantive question was in favour of the assessee.

Final Conclusion: The reference was answered against the Revenue, and the challenge to the revisional order failed.

Ratio Decidendi: Abatement under the double taxation agreement had to be worked out strictly on the basis of the foreign assessment contemplated by the agreement, and could not be expanded to reopen or recompute unrelated double tax relief already granted on another foreign income.

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