C.A.P. ANDIAPPAN versus C.I.T. MADRAS & ANR

Citation: [1972] 1 S.C.R. 88 · Decided: 09-08-1971 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed

Judgment (excerpt)

C.A.P. ANDJAPPAN 
v. 
C.1.T. MADRAS & ANR 
August 9, 1971 
[K. S. HEGDE AND A.N. GROVER, JJ.] 
Income-tax Act (11 of J 922). s. 49A-Agreement between 
h1d;a and Ceylon, Art 3, ;rem 8-Scope of-Relief under qey!on 
Income-tax Ordinance 1932 s. 45(2)-Abatement to wl11c/1 a!1 
assessee res;dent ;,i Ind;a and carry;,1g on business in Ceylon rs 
elllitled to. 
The appellant was a resident in India and was carrying on business 
in Ceylon. 
His entire assessable income for the years 1959-60 
and 
1960-61 was what he earned in Ceylon. 
He was liable to be assessed 
as a non-resident, but, in view of s. 45(2) of the Ceylon Inco~e-tax 
Ordinance, 1932, and of the Agreement for 'Assess~ent for Re!Jef or 
for Avoidance of Double Taxation in India and Ceylon' as prov1ded 
·in s. 49A of the Indian Income tax Act, 1922, he was taxed as if be was 
a resident in Ceylon and assessed to pay a sma11er sum as 
ta~. The 
Income-tax authorities in India computed the tax under the Ind1an law 
.and gave as abatement, t11e tax payable by him in Ceylon as per the 
Agreement, and cal1ed upon him to pay the balance. 
On the questions: (I) whether be was not liable to be taxed at all 
in India, and (2) if he was liable to be taxed in India, what should have 
been the proper abatement, the High Court confirmed the order of the 
Income-tax authorities. 
Jn appeal to th is Court, 
A 
B 
c 
D 
E 
HELD; (1) Article 3 of the Agreement begins with the words 'Each 
,country sba11 make an assessment in the ordinary way under its own 
F 
·1aws.' Therefore, the appellant was liable to be taxed in India. [91E-F] 
(2) The Article read with item 8 of the Schedule to the Agreement 
shows that from out of the amount ascertained under the first part of 
·the Article the tax payable -by the assessee in the other country in respect 
of the w~o1e or part of the amount brought to t~x under !he first part 
of the Art1c1e, should be deducted. 
The word 'attn bu table' In the Article 
G 
.means 'payable'. In considering what taxes are attributable to the tax 
laws of a particular country, one has to take jnto consideration all the 
provisions of the statutes levying tax, that is, for determining the tax 
.due from an assessee, one has not merely to look to the charging section 
but also to the provisions ~roviding exemptions and allowances. 
s~ 
read, the amount of tax attnbutab1e to the Ceylonese law is that which 
was ultimately actuaJJy levied on the assessee and not the Jeviable in 
H 
·Ceylon on a non-resident. 
[92B-G] 
Ramesh R. Saraiya v. C.1.T. Bombay 55 I.T.R. 699 (S.C.) applied. 
A 
B 
c 
ANDIAPPAN v. C.I.T. (Hegde, !.) 
89 
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 
1689 and 1690 of 1968. 
Appeals from the judgment and order dated January 
19, 1967 of the Madras High Court in Writ Petitions 
Nos. 1030 and 1031 of 1963. 
T. A. Ramachandran, for the appellant (in both the 
appeals). 
· 
S. C. Manchanda, R. N. Sachthey, B. D. Sharma and 
S P. Nayar, for the respondents (in both the appeals). 
The Judgment of the .Court was delivered by 
Hegde, J. These appeals by certificate arise from · 
the decision of the High Court of Madras in Writ Petitions 
Nos. 1030 and 1031 of 1963. Therein the petitioner 
invoked the extraordinary jurisdiction of the High Court 
D under Article 226 of the Constitution to quash the orders 
of the Respondents wherein he was not granted the abate-
ment he sought to obtain in the assessment years 1959-60 
and 1960-61 
The High Court came to the conclusion 
that the appellant is not entitled to any more abatement 
E than that was given by the authorities under the 'Assess-
ment for Relief or f~r Avoidance of double Taxation 
in India and Ceylon' -Which will be hereinafter referred to 
as the "agreement". It accordingly dism~sed the Writ 
Petitions but gave a certificate under article 133(l)(c) of 
the Constitution of India certifying that this is a fit case 
F for appeal to this Court. 
· The appellant is a resident in this country. But he 
is carrying on l;rnsiness in Ceylon. During the assessment 
year 1959-60 he earned a gross income of Rs. 39,473/-
and in the assessment year 1960-61 he earned a gross 
G income of Rs. 39,047/-. He had only a house in India 
whose annual rental value was Rs. 38/-. The entire 
assessable income of his was that what he earned in Ceylon. 
On his income in Ceylon, he was taxed in a sum of Rs . 
. 5,919/- for the assessment year 1959-60 and in a sum of 
Rs. 6,036/- for the assessment year 1960-61. For t

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