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PETITIONER: TURNER MORRISON & CO., LTD.

       Vs.

RESPONDENT: COMMISSIONER OF INCOME-TAX,.WEST BENGAL.

DATE OF JUDGMENT: 16/01/1953

BENCH: DAS, SUDHI RANJAN BENCH: DAS, SUDHI RANJAN MAHAJAN, MEHR CHAND BOSE, VIVIAN BHAGWATI, NATWARLAL H.

CITATION:  1953 AIR  140            1953 SCC  520  CITATOR INFO :  C          1954 SC 198  (10A)  R          1954 SC 470  (39)  D          1956 SC 634  (12)  D          1960 SC1279  (8)  R          1962 SC 977  (5,7)  E          1965 SC1343  (7)  RF         1968 SC  75  (6)

ACT: Indian  Income-tax  Act (XI of 1922), ss. 4 (1) (a),  4  (1) (c),  42,  43-Non-resident company-Sale in  India  of  goods manufactured outside India-Person effecting sales in  India- Whether agent of non-resident-Profits received in India from sales-Whether  assessable  under  s. 4 (1)  (a)  or  s.  42- Liability of agent-Scope of s. 43.

HEADNOTE: The Port Said Salt Association Ltd., a company  incorporated in  the United Kingdom carried on business in Egypt and  had its  headquarters in Egypt.  It manufactured salt  in  Egypt and part of the salt so manufactured was consigned to Turner Morrison  and  Co. Ltd., (the assessee) for sale  in  India. The  assessee  effected sales in India  through  brokers  at prices  approved  by  the Association,  collected  the  sale proceeds  and received a commission of 21//2%  generally  on all sales.  After deducting the expenses and commission  the balance was remitted to the Association in Egypt.  On  these facts the assessee was treated as agents of the  Association under  s.  43 of the Indian Income-tax Act and  assessed  to incometax under s. I (1) (a) or alternatively under s. 4-(r) (c) of the Act on the income derived by the Association from the sale of salt in India.  The High Court of Calcutta  held that  the  income in question was chargeable  to  income-tax under s. 4 (1) (a) as income received in India and not under s. 42 of the Act: Held,  (i),  that, as the assessee was  entrusted  with  the selling  of goods consigned to them for sale,  handling  the cargoes,  issuing delivery orders, collecting  the  proceeds etc.,  they were agents of the Association, and did not  act merely as a post office;

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Pondicherry Railway Co. v. Commissioner of Income-tax,  Mad- ras (1931) I.L.R. 54 Mad. 691 referred to. (ii) as  the  goods were neither imported nor  sold  by  the assessees  on  their  own  account but  on  account  of  the Association  the  income  received  by  the  assessees  were received  by  them on behalf of the Association and  not  on their own account. Ex parte White (L.R. 6 Ch.  A. 397) distinguished. (iii)     As the assessees were authorised not only to  sell but to collect the price from the purchasers, the income was received by the assessee as agents of the Association. Butwick v. Grant (L.R. [19241 2 K.B. 483) distinguished, 521 (iv) The  fact that the assessors as agents had a  right  to retain  the expenses incurred by them and  their  commission out  of  the  proceeds  could not  make  the  sale  proceeds received  by  them- as agents any the less the  property  of their principals. Colquhoun v. Brooks (2 Tax Cas. 490) and Saiyid Ali Imam  v. King Emperor ([1925] I.L.R. 4 Pat. 210) referred to. (v)  When  the  gross  sale proceeds were  received  by  the agents  in India they necessarily received whatever  profits and gains were lying dormant in them.  If on taking accounts there were income, profits or gains, then the  proportionate part  thereof attributable to the sale proceeds received  by the  agents in India was income, profits and gains  received by them at the moment the gross sale proceeds were  received by them in India, and s. 4 (1) (a) of the Income-tax Act was immediately  attracted and the income, profits and gains  so received  became chargeable to tax under s. 4 (1)  (a)  read with s. 3. Grainger & Son v. ’William Lane Gough (L.R. [1896] A.C. 325) relied on. (vi) Where  income, profits and gains are actually  received in India s. 4 (1) (a) applies and it is no longer  necessary for  the revenue to resort to the fiction introduced  by  s. 42, and the assessees were properly assessed under s. 4  (1) (a) and not under s. 4 (1)  (c),  Section  4 (1) (a) applies to all  categories  of assessees including non-residents. Hira Mills v. Income-tax Officer, Cawnpore ([1946] 14 I.T.R. 417),  Burugu Nagayya v. Commissioner of Income-tax,  Madras ([1949]  17  I.T.R.  194) and  Pondicherry  Railway  Co.  v. Commissioner  ’of Income-tax, Madras ([1931] I.L.R. 54  Mad. 691) relied on. (vii)     The  mere fact that the assessors were treated  as agents under s. 43 of the Act did not make it compulsory  on the  part of the revenue authorities to assess under s.  42, for  an  appointment  as agent under s. 43 is  for  all  the purposes of the Act and not only for the purposes of s. 42. imperial Tobacco Co. of India Ltd. v. Secretary of State for India  ([1922] I.L.R. 49 Cal. 721), Commissioner of  Income- tax,  Bombay v. Metro Goldwyn Mayer (India) Ltd.  ([19391  7 I.T.R.  176),  Caltex Ltd. v.  Commissioner  of  Income-tax, Bombay City ([1952] 21 I.T.R. 278) explained. Judgment of the Calcutta High Court affirmed.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 41 of  1952. Appeal from a Judgment and Decree dated 25th July, 1950,  of the  High Court of Judicature at Calcutta (Sen  and  Chunder JJ.) exercising Special Jurisdiction (Income-tax) in Income- tax Reference No. 31 of 1949,

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522 S.   Mitra (S.  N. Mukherjee, with him) for the appellant. C.   K. Daphtary, Solicitor-General for India (P.  A. Mehta, with him) for the respondent. 1953.  January 16.  ’The Judgment of the Court was delivered by DAS J.-This appeal arises out of six references made by  the Calcutta  Bench of the Income-tax Appellate  Tribunal  under section  66(1)  of the Indian Income-tax Act,  two  of  them relating to the incometax assessment years 1943-44 and 1944- 45 and the remaining four relating to excess profits tax for the  chargeable  accounting  periods  ending  on  the   31st December  of  each  of the years 1940, 1941  1942  and  1943 respectively. The  relevant facts appearing in the statements of the  case are  as follows: Messrs.  Port Said Salt Association  Ltd  , (hereinafter referred to as "the Association") is a  company incorporated  in the United Kingdom and has  its  registered office there.  The Association, however, carries on business in Egypt and its head office is situate in Alexandria  where the  annual general meetings of its shareholders are  held.’ Not  being  resident in the United Kingdom  the  Association pays no British income-tax on its profits.  For the purposes of   assessment   under  the  Indian  Income-tax   Act   the Association  has been considered to be a non-resident.   The association manufactures salt in Egypt where it has  certain concessions and the salt as manufactured is sent for sale in any  country where there is a suitable market.  Part of  the salt  so  manufactured by the Association  is  consigned  to Messrs.   Turner Morrison & Company Ltd. for sale in  India. All   shipping  operations,  ie.,  chartering  of   steamer, loading,  insurance  etc.,  are effected  in  Egypt  by  the Association  who  sends  the documents  to  Messrs.   Turner Morrison  &  Company  Ltd.   Messrs.   Turner  Morrison  and Company  Ltd. effect sales in India through brokers  at  the best price 523 obtainable   at  or  above  the  prices  approved   by   the Association.    Turner  Morrison&  Company  Ltd.are   -.paid commission at the rate of 2 1/2 per cent. generally on  -all the  sales  except in some cases where 1 1/4  per  cent.  is paid.   All  handling of the cargoes when  they’  arrive  at Calcutta  and  the  necessary  disbursements  in  connection therewith  are  carried out and made by Turner  Morrison,  & Company  Ltd.   The sale proceeds are  collected  by  Turner Morrison & Company Ltd. and credited to the account kept  in their  own  name  with the  Hongkong  and  Shanghai  Banking Corporation.   After deducting the expenses including  their commission  the  balance is remitted by  Turner  Morrison  & Company  Ltd. to the Association in ;Egypt.  On these  facts the  Income-tax  Officer treated Turner Morrison  &  Company Ltd.  as the agents of the Association under section  43  of the  Indian Income-tax Act and assessed them  to  income-tax for the two assessment years mentioned above under section 4 (1) (a) or, alternatively, under the first part of section 4 (1) (c).  They were also assessed to excess profits tax  for the   four  chargeable  accounting  periods  herein   before mentioned. Turner  Morrison & Company Ltd. (hereinafter referred to  as the   Agents)  preferred  appeals  against   the   aforesaid assessment  orders to the Appellate  Assistant  Commissioner who,  however,  dismissed the appeals.  The Agents  -took  a further  appeal to the Income-tax Appellate  Tribunal.   The submission  of the Agents before the Tribunal was  that  the assessment  under  section  4(1) (a) was bad  and  that  the

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assessment  should  have been made under section 42  of  the Act.  The Tribunal, on a consideration of the facts, came to the conclusion that. the assessment was properly made  under section 4(1) (a) and incidentally the Tribunal also came  to the  conclusion  that  the  alternative  contention  of  the Income-tax  authorities that the assessment should  be  made under  the  first- part of section 4(1) (c) was  also  well- founded and that section 42 had no application to the case 524 The  result was that the Tribunal confirmed the findings  of the   Income-tax   Officer  and  the   Appellate   Assistant Commissioner and dismissed the appeals. On  the application of the Agents made under section 66  (1) of  the  Act the Appellate Tribunal referred  the  following questions to the High Court:" (1) Whether, in the facts  and circumstances  of  this  case, the  Tribunal  was  right  in holding that the income, profits and gains derived from  the sale  of  salt  in British India are assessable  to  tax  as income, profits and gains received or deemed to be  received under section 4(1)(a) ? And if the answer to the first question is in the negative, (2)  Whether,  in the facts and circumstances of this  case, the  Tribunal was right in accepting the contention  of  the Department that the income accrued or arose or is deemed  to accrue  or  arise  in  India and is  assessable  to  tax  as contemplated by section 4 (1) (c)? (3)  Whether the Tribunal was right in the circumstances  of this  case  in  rejecting the  contention  of  the  assessee (applicant)   that  the  income,  profits  and   gains   are chargeable  to  tax from the sale of salt in  British  India under section 42 only?" The  reference  came up for disposal before a Bench  of  the Calcutta  High Court Consisting of Sen and Chunder JJ.   The learned  Judges gave the following answers to the  questions :- " Question (1).  The answer is in the affirmative so far  as income-tax is assessed.  Excess profits tax, however, cannot be levied on this basis. Question  (2).   The  Tribunal was wrong  in  accepting  the contention  of  the department that the  income  accrued  or arose  in India.  The Tribunal did not hold that the  income is  income  which  should be deemed to accrue  or  arise  in India.   The  part  of the question which  states  that  the Tribunal  did  so is not in accordance with fact.   We  find that the income, 525 profits  and gains must be deemed to have arisen or  accrued in India so far as excess profits tax is concerned and  that section 42(3) of the Income-tax., Act applies to the levy of excess  profits  tax by virtue of section 21 of  the  Excess Profits Tax Act. Question (3). - The Tribunal was right in rejecting    the contention that the income, profits and gains are chargeable to tax under section 42 only.  They are also  chargeable  to income-tax  as falling within the purview of section  4  (1) (a)  of  the Income-tax Act as income received in  India  on behalf  of the assessee company.  In such a case section  42 of the Income-tax Act would have no application." It  will  be  noticed that the  Agents  succeeded  in  their contentions  so  far as they related to  the  assessment  of excess  profits tax.  The answers given by the  High  Court, however, went against them in so far as they related to  the assessment of income-tax for both the assessment years. The  Agents  thereafter made two applications  to  the  High Court under section 66A for leave to appeal to this Court in

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respect  of the income-tax assessments for each of  the  two assessment  years.  The High Court certified that the  cases were  fit  for  appeal to this Court and  granted  leave  to appeal  and directed that the two appeals  be  consolidated. The  Commissioner of Income-tax, West Bengal,  however,  has not  preferred any appeal from that part of the judgment  of the High Court which sets forth its opinion on the questions in so far as they relate to the assessment of excess profits tax.   This  appeal is, therefore, concerned only  with  the answers  given by the High Court to the questions in so  far as they relate to the assessments of income-tax only. The first main contention urged by Mr. S. Mitra appearing in support of this appeal is that no income, profits and  gains were  received in India by or on behalf of the  Association. He  seeks  to  make good this contention  on  a  variety  of reasons  all  of which are not quite  consistent  with  each other and some of 526 which  way  even be mutually destructive.   Relying  on  the decisions  in  Narasammal  v. The  Secretary  of  State  for India(1)   and   Pondicherry   Railway   Company   Ltd.   v. Commissioner of Income-tax, Madras(2). Mr. Mitra urges  that no  income,  profits and gains were "received" in  India  at all,  for  the  Agents were nothing but  "an  animated  Post Office".   We are bound to reject this reasoning as  unsound on  the same grounds on which the Privy Council  rejected  a similar  contention  in  the  case  of  Pondicherry  Railway Company  Ltd.(2).  In  the language of  ford  Macmillan  the functions of the Agents far transcended the mere  mechanical act  of  transmitting  the sums collected  by  them  to  the Association  in Egypt.  They were entrusted  with  important duties on behalf of the Association, namely, selling of  the goods  consigned  to them for sale,  handling  the  cargoes, issuing  delivery orders, collecting the sale  proceeds  and then to remit the same after deducting the expenses incurred by  them and their own commission.  The description  of  "an animated Post Office" can hardly. apply to an agent of  this description. Mr. Mitra thereupon shifts his ground and urges that even if income,  profits  and  gains were  received  in  India,  the receipt  was  not by or on behalf of the  Association.   The contention  is  that  though the  Agents  are  described  as agents,  they were not so in fact or in law and reliance  is placed  on  the  well known case of Ex  parte  White(3).   A perusal of that case will clearly show that there the person to  whom goods were consigned, together with a  price  list, was, by their course of dealings, entitled to sell the goods at any price he liked and that he remitted to the  consignor of the goods only the listed price, In other words, although the  parties looked upon their dealings as  constituting  an agency.  the  consignee did not in fact sell  the  goods  as agent of the consignor but did so on his own account and any price realised in excess of the listed price was his own (1)  [1916] I.L.R. 39 Mad. 885. (2)  [1931] I.L.R. 54 Mad. 691; L.R. 58 I.A. 239. (3)  L R. 6 Ch.  A. 397. 527 profit.   On  the  facts found by the  Tribunal,  which  the learned  counsel  is  not  entitled  to  challenge  for  the purposes of’ these proceedings, it is quite: clear that  the goods  were not imported by the Agents on their own  account and they never became a purchaser at any stage.  They  could not sell the goods at any price they liked, for they had  to sell them at or above the price approved by the Association. If  the  sale  was at a rate above the  approved  price  the

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excess was never retained and appropriated by the Agents  as their  -own  profits.   Mr. Mitra  thereupon  contends  that assuming  that the, Agents had sold the goods as agents  of. the Association they did not necessarily have the  authority to  receive  payment of the price.  Reliance  is  placed  on Butwick  v. Grant(1) in support of the proposition  that  an authority  to sell does not of necessity imply an  authority to  receive  payment  of the price.  The  argument  is  then formulated  that as the Agents had no authority /to  receive the  price, it cannot be said that the receipt was by or  on behalf  of the Association.  This argument  again  overlooks the  course-of  business  as found  by  the  Tribunal  which clearly  implies  that the Agents were not only  agents  for selling the salt but also for collecting the sale proceeds. The  third  ground  urged  in  support  of  the  first  main contention  is  that  the entire amounts  collected  by  the Agents  were  not  receivable by the  Association,  for  the agents were entitled to a portion of it, namely, the  amount spent by them in meeting the handling charges and their  own commission.  On the authority of Colquhoun v. Brooks(2)  and Saiyid  Ali Imam v, King Emperor(3) Mr. Mitra contends  that the  sale  proceeds  collected by the  Agents  were  not  so completely  under  the control of the  Association  that  it could  by  an act of its own have the entire  sale  proceeds actually  transferred  to  it in Egypt.   This  argument  is obviously fallacious.  The concession that the Agents were (1)  [I924] 2 K.B. 483. (2)  2 Tax Cas. 400. (3)  (1925) I.L.R. 4 Pat. 210; A.I.R. 1925 Pat, 381. 528 entitled to deduct their disbursements and their  commission out  of  the-sale  proceeds clearly implies  that  the  sale proceeds belonged to the Association, for the ’Agents  could not deduct the dues by the Association from something  which did  not  belong  to the Association.  Section  217  of  the Indian  Contract Act gives to an agent the right to  retain, out  of any sum received on account of the principal in  the business of the agency,all moneys due to himself in  respect of  advances  made or expenses properly incurred by  him  in conducting  such  business and such  remuneration  as  maybe payable  to  him  for acting as  agent.   Section  221  also confers a right on the agent to retain the goods, papers and other  property of the principal received by him  until  the amount due to him for commission, disbursements and services in  respect  of the same has been paid or accounted  for  to him.  The right of retainer and lien conferred on the  agent does not make the amount received by the agent on behalf  of the  principal any the less the property of the   principal. The  principal is the full -owner and has  complete  control over  his properties in the hands of the agent subject  only to  the latter’s statutory right of retainer and  lien.   It follows,  therefore, that the entire sale proceeds  received by the Agents in the case before us were received on  behalf of the Association and belonged to it subject to the  rights of the Agents. Finally,  Mr. Mitra urges that the gross sale proceeds  were not  really income, for they were only credit items  in  the account  and that several amounts were to be debited in  the same account and if there remained any credit balance,  such balance  alone could be regarded as stamped with the  formal impress  of the character of income, profits and  gains  and capable of being dealt with as such and income, profits  and gains  could  be  said to have been received  only  at  that stage.    We  have  been  referred,  in  support   of   this contention,  to  certain  observations  in  the  cases,   of

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Commissioner  of  Taxes  v.  The  Melbourne  Trust  Ltd.(1), Russell v. Aberdeen Town and County Bank(2), Be Rogers Pyatt Shellac (1) [1914] A.C. 1001 at p. 1011. (2) 2 Tax Cas. 321 at p. 327. 529 &  Co. v. Secretary of State for India(1),  Commissioner  of Income-tax,  Bombay City v. Agarwal & Company Bombay(2),  In re   Govind  Ram  Tansukh  Rai()  and  other   cases.    The observations  in those several cases have to be read in  the light of the facts of those cases and the subject which  was then under discussion.  So read those observations can  have no  application to the facts of this case.  The case  Morley v.  Tattersall(4)  also relied on by Mr.  Mitra  is  clearly distinguishable because the liability for the sale  proceeds received  by the auctioneers continued to exist  even  after the  unclaimed balances were transferred to the  account  of the  partners and, therefore, they could not be regarded  as trade  receipts.  On the other hand, the case of Grainger  & Son  v.  William Lane Gough(5) will clearly  show  that  the moneys received by an agent on behalf his foreign  principal could  be  regarded as including trade  profits  within  the meaning of section 41 of the English Income Tax Act of  1842 (See  per  Lord Herschell at p. 337 and Lord  Morris  at  p. 345).   The  several passages quoted in the  judgment  under appeal  from  the  cases of Neilson Anderson  &  Company  v. Collins  and  Taru v. Scanlan(6) clearly indicate  that  the "net sale proceeds are included in the gross sale  proceeds. The  same  principle, as pointed out in  Bangalore  Woollen, Cotton & Silk Mills Co. Ltd. v. Commissioner of  Income-tax, Madras(7) is implicit in the decisions of the Privy  Council in Commissioner of Income-tax, Bombay Presidency and Aden v. Chunilal B. Mehta(8) and Commissioner of Income-tax,  Madras v. S. L. Mathias(9).  There can, therefore, - be no question that  when  the  gross sale proceeds were  received  by  the Agents  in India they necessarily received whatever  income, profits and gains were lying dormant or hidden, or otherwise embedded in theni.  Of course, if on the taking of  accounts it be found that there was no (1)  [1925] I.L R. 52 Cal. 1 at P. 31. (2) [1952] 21 I.T.R. 293.   (6)     13 Tax Cas 91. (3) [1944] 12 I.T.R. 450.   (7)    [1950]  IS I.T.R. 423  at P. 438. (4) [1938] 3 All E.R. 296.   (8)   (1938) 65 I.A. 332. (5) [1896] A.C. 325.         (9)   I.L.R. [19391 Mad. 178; 7 I.T.R. 48. 530 profit  during  the  year then the question  of  receipt  of income, profits and gains would not arise but if there  were income  profits  and  gains,  then  the  proportionate  part thereof  attributable to the sale proceeds received  by  the Agents  in India were income, profits and gains received  by them at the moment the gross sale proceeds were received  by them in India and that ,being the position the provisions of section 4 (1) (a) were immediately attracted and the income, profits and gains so received became chargeable to tax under section 3 of the Act.  In our -opinion there is no substance in the first main contention a umbrated by Mr. S. Mitra. Mr.  Mitra’s second main point is that, assuming that  there was receipt of income, profits and gains within India,  such income,  profits and gains clearly arose through or  from  a business connection in India and, therefore, the  provisions of  section 42( 1) would apply and such income, profits  and gains should be dealt with income, profits and gains  deemed to  accrue or arise in India and consequently the  inclusion

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of such income, profits and gains in the total income should be  under  section  4 (1) (c) for the  Association  is  non- resident.  Mr. Mitra urges that the charging under section 3 is to be " in accordance with and subject to the  provisions of this Act".  Likewise, section 4 (1) is also " subject  to the  provisions of this Act." This, according to Mr.  Mitra, at  once  attracts section 42 and such income,  profits  and gains being within section 42 must be included in section  4 (1) (c) and the other alternative, i.e., section 4 (1)  (a), is  no longer applicable.  In other words, according to  Mr. Mitra’s contention, section 4 (1) (a) becomes a dead  letter so  far as income, profits and gains arising or accruing  to a.  non-resident are concerned.  We are unable to accede  to this  contention.  Section 42 only speaks of deemed  income. The whole object of that section is to make certain  income, profits  and gains to-be deemed to arise in India so  as  to bring  them to charge.  The receipt of the income,  profits, and  gains being one of the tests of liability 531 where the income, profits and gains are actually received in India it is no longer necessary for the revenue  authorities to have recourse to the fiction and this has been held quite clearly in Hira Mills Ltd. v.Income-tax Officer, Cawnpore(1) and  in  Burugu,  Nagayya and  Rajanna  v.  Commissioner  of Income-tax,  Madras  (2).   This is  also  implicit  in  the decision of the Privy Council in Pondicherry Railway Company Ltd.,  v.  Commissioner of Income-tax, Madras(5),  to  which reference has already been made.  Section 4(1) (a) in  terms is,  unlike section 4 (1) (b) or 4 (1) (c), not confined  in its  application  to any particular category  of  assessees. ’Section 4 (1) (a is general and applies to a resident or  a non-resident  person.  The second proviso to section 4  (1), although  it relates to the case of a person not  ordinarily resident,  also  indicates that income,  profits  and  gains which  accrue or arise to such a person without the  taxable territories can be included in his total income if they  are brought  into  or received in the  taxable  territories  and become chargeable to fax under section 3 read with section 4 (1) (a).  For reasons hereinbefore stated this contention of -Mr.    Mitra  must  be  rejected.   It  may  be  that   the construction  we  are, adopting in agreement with  the  High Court  may  operate  harshly against  nonresidents  in  that income,   profits   and  gains  attributable   to   business operations  outside India may also be brought to  charge  as having been received in India and such consequence may deter non-resident merchants from doing business in India.   These indeed  are  serious considerations but the Courts  have  to construe  the statute according to the plain’  language  and tenor  thereof  and  if  any  untoward  consequences  result therefrom  it  is  for authority other than  this  Court  to rectify or prevent the same. The  last main point urged by Mr. Mitra is that as  soon  as Turner  Morrison & Co. Ltd., were treated as  agent’s  under section  43, the provisions of section 42  were  immediately attracted.   In support of this contention Mr. Mitra  relies on the decisions in Imperial (1)  [1946] 14 I.T.R. 417 at P. 423.  (2) [I949]  17  I.T.R. 194. (3) (193I) I.L.R. 54 Mad. 69i ; L.R. 58 I.A. 239. 69 532 Tobacco Company of India Ltd. v. The Secretary of State  for India  (1),  Commissioner of Income-tax,  ,Bombay  v.  Metro Goldwyn  Mayer  (India) Ltd.(2) and Caltex (India)  Ltd.  v. Commissioner  of.  Income-tax, Bombay City(3), where it  has

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been  held  that section 43 is only a machinery  for  giving effect to section 42.  To say that section 43 is really only machinery for giving effect to section 42 is not to say that section  43  has  no other purpose.  Section  42  refers  to income,  profits  or gains accruing or arising  directly  or indirectly  through or from (i) any business  connection  in India,  (ii)  any property in India or (iii) any  assets  or sources  of  income  in India, or (iv)  any  money  lent  at interest  and brought into India in cash or in kind  or  (v) the sale, exchange or transfer of a capital asset in  India. All  these  incomes  by virtue of this section  have  to  be deemed  to  be income accruing or arising within  India  and where the person entitled to such income, profits :or  gains is  a non-resident such income, profits and gains  are  made chargeable  to income-tax either in his name or in the  name of his agent who is to be deemed to be for all the  purposes of  this  Act the assessee in respect  of  such  income-tax. Section  43, however, refers to a person (a) employed by  or on  behalf  of,  a non-resident,  (b)  having  any  business connection  with such non-resident or (c) through whom  such non-resident is in receipt of any income, profits or  gains. A  person  who  comes within one or  other  of  these  three categories,  may,  under  this section, be  treated  by  the Income-tax  Officer  as agent of the non-resident  and  such person  is for all the purposes of this Act to be deemed  to be  such  agent.   The third category  refers  to  a  person through  whom the non-resident is in receipt of any  income, profits or gains.  The portion of section 43 which refers to the  person through whom the non-resident is in  receipt  of any  income, profits or gains does not  necessarily  attract the  provisions of section 42, for the income,  profits  and gains received by the person (1)  (1922) I.L.R. 49 Cal. 721. (2)[1939] 7 I.T.R. 176. (3) [1952]21 I.T.R. 278, 533 who  is  treated  as agent under section, 43  may  not  fall within any of the several categories of income, profits  or, gains  referred to in section 42.  The languages of  section 43 will also attract the provisions of section 40, for  that section  also  contemplates  a person  who  is  entitled  to receive  on behalf of the# non-resident any income,  profits and gains chargeable under this Act and may even attract the provisions  of section 4(1)(a).  In our opinion there is  no warrant  for the contention that an appointment of a  person as  a statutory agent under section43 only attracts  section 42 for, such appointment is for all purposes of the Act  and not only for the purposes of section 42. In our judgment, for reasons stated above, the answers given to the questions by the High Court, in so far as they relate to  the assessment of incometax with which alone we are  now concerned,  are  correct and this appeal must  be  dismissed with costs. Appeal dismissed. Agent for the appellant: P. K. Mukherji. Agent for the respondent: G. H. Rajadhyaksha.