TaxTMI 
TaxTMI 
1938 (11) TMI 20
X X X X Extracts X X X X
X X X X Extracts X X X X
....rrect in law in applying Rule 33 generally. We are told by Mr. Coltman for the assessees that the second question has been adjusted between the assessees and the Commissioner, and, by consent of the parties, that question is struck out and we only have to deal with the first question. The first question is not, I think, very happily expressed, because it seems to raise a question only under Section 43 of the Income-tax Act, whereas it is clear from the terms of the reference that the question raises both under Section 42 and under Section 43. If it was only a question under Section 43 it would be merely of academic interest. Section 42 provides:- "(1) In the case of any person residing out of British India, all profits or gains accru....
X X X X Extracts X X X X
X X X X Extracts X X X X
....expression "through or from any business connection". I think these words denote some element of continuity in the relationship between the person in India who makes the profits and the non-resident who receives them. A single transaction would, I think, not fall within the section. If a manufacturer of a motor car in England or America sells it to a customer in India, there is no doubt a business connection in relation to that sale between the manufacturer and the purchaser, and the manufacturer probably makes a profit, but nobody would suggest that in respect of the profit on that single transaction he is liable to pay British Indian income-tax. I think there must be some element of continuity in the relationship between the par....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o have the effect of making the user of these productions by the vendee profitable. He has, for instance to supply negatives and positives, to maintain a publicity department in New York and to supply news items, and so forth. Then the vendee enters into various contracts under which he has to provide sufficient sales force, and he has to pay 70 per cent. of the takings to the vendor and he has to deliver accounts and make remittances weekly with an allowance for bad debts. He has to take all necessary steps to protect the property of the vendor in respect of the copyright, and so forth; he has to advertise, and is not to assign. There is a clause that nothing in the document is to be construed as constituting a partnership; and the learned....