HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
McGregor & Balfour Ltd. v. Commissioner of Income-tax, West Bengal
Civil Appeal No. 265 of 1956
[1959] Supp. 2 SCR 355 ·
Indian Finance Act 1946 section 11(14) · Excess Profits Tax Act 1940 section 12(2)
Sources & disclosures includedDownload original judgment / order
3-judge bench · B. P. Sinha · J. L. Kapur · M. Hidayatullah
Assessment years: 1947-48
01 · Facts of the case
A United Kingdom company trading also in India received repayment of UK excess-profits tax previously deducted in computing its Indian taxable profits. It challenged Indian taxation because repayment occurred outside taxable territory.
Source: Primary report: SCR 356–357
02 · Discussion by the Hon’ble Court
Section 11(14) deemed repayment income and required its treatment as income of the previous year of repayment. The statutory fiction restored the income character of amounts whose earlier deduction had reduced taxable profits and imposed the charge itself.
Source: Primary report: SCR 358–363
03 · Judicial decision
The repayment was taxable under the provision without further proof of territorial receipt beyond the specified repayment and prior deduction conditions.
Source: Primary report: SCR 363–364
04 · Outcome / in whose favour
The company’s appeal was dismissed with costs; the first referred question remained answered affirmatively.
Source: Primary report: SCR 364
05 · AKHB REVIEW POINT
The separate residence question was final because Revenue had not appealed it. The contention that the 1946 Finance Act provision did not apply to later years was not seriously pressed and was not supported by full reasons; this decision is not a general territorial-income rule.
Source: Primary report: SCR 357
Source & verification
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Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
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