https://www.taxtmi.com/caselaws?id=7366 Section 42(1) of the Indian Income-tax Act, 1922 applies only where there is a real statutory nexus with income deemed to accrue in the taxable territories. Interest on an overdraft advanced and repaid in London did not fall within the provision merely because the borrower later used the funds to buy machinery brought into India; the money was not brought into India in kind, and the loan remained a simple borrowing rather than a composite arrangement. By contrast, interest from tea companies was taxable in principle, and the appellate computation, including proportionate head-office deductions, was accepted as legally proper. en-us Wed, 28 Feb 1968 00:00:00 +0530 Wed, 18 Feb 2009 18:26:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7366 Section 42(1) of the Indian Income-tax Act, 1922 applies only where there is a real statutory nexus with income deemed to accrue in the taxable territories. Interest on an overdraft advanced and repaid in London did not fall within the provision merely because the borrower later used the funds to buy machinery brought into India; the money was not brought into India in kind, and the loan remained a simple borrowing rather than a composite arrangement. By contrast, interest from tea companies was taxable in principle, and the appellate computation, including proportionate head-office deductions, was accepted as legally proper. Case-Laws Income Tax Wed, 28 Feb 1968 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7366