1973 (3) TMI 54

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....entical. In Civil Appeal No. 2147 of 1969, at the instance of the assessee, the Income-tax Appellate Tribunal, Hyderabad Bench, referred the following question to the High Court of Andhra Pradesh : " Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 94,500 incurred by the assessee in London is exempt under section 5(o) of the Expenditure-tax Act ? " Similar questions have been referred to the High Court in other appeals. The High Court answered the above-mentioned question in the negative and in favour of the revenue. Aggrieved by that decision, the appellants have brought these appeals. We shall now set out the material facts. The two assessees who are the appellants in there appeals are the ....

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....that the amount in question accrued in India. The trustees were liable to pay that amount to the assessees only in India. When the trustees remitted that amount to the asessees to London, they were merely functioning as the agents of the assessees. That being so the Tribunal held that the amounts in question were realized by the assesesees in India. This finding was assailed on behalf of the assessees before the High Court but the High Court rejected the contention of the assessees and affirmed the decision of the Tribunal. Mr. Setalvad, appearing for one of the assessees, contended that the amount in question was realized by the assessees only in London and not in India. In support of that contention he relied on the language of section....

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.... amounts in question were realized by the assessees in London. We have earlier seen that, as per the terms of the trust deed, read along with the terms of the tripartite agreement, the assessees were entitled to receive the amounts in question only in India. The trustees could not have paid them those amounts outside India. But, in fact, the trustees have year after year been remitting those amounts to the assessees to London and the assessees were receiving those amounts without any objection. From these circumstances the Tribunal has drawn the inference that, when the trustees remitted the amounts in question to the assesees at London, they were only doing so as the agents of the assessees. The Tribunal opined that the trustees must ha....