TaxTMI 
TaxTMI 
1927 (5) TMI 1
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....in British India, is the income received in British India so as to make it taxable under Section 4 read with Sections 6, 10 and 13 of the Act. 2. The assessee has a business of his own in Rangoon carried on by an agent and is interested with another or others in a money-lending business in Penang in which he is the chief partner. From the Rangoon business under his orders a sum of Rs. 78,768-7-3 was transferred in cash to the Penang business. In the books of the Rangoon business a sum of Rs. 12,174 is entered as interest on that money from Penang and the assessee has in respect of that interest been assessed under Section 4, Subsection 1 of the Indian Income-tax Act as income accruing, arising or received in British India. The assesse....
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....come-tax assessment adopt the cash basis. What is done in accordance with the mercantile basis is that the debit entries made on account of interest due by the assessee to his creditors in foreign places are treated as payments of interest though interest has not actually been paid and such debits are allowed as an expenditure in computing the profits of the assessee's business in British India. Similarly credit entries made on account of interest due by creditors in foreign places to the assessee are treated as payments of interest though that interest has not actually been paid and admittedly in this case this basis has been adopted and no question as to whether or not interest has actually been received or has actually been paid c....