THE UNION OF INDIA vs MADAN GOPAL KABRA.

The Supreme Court held that under Section 3 of the Finance Act, 1950, the territory of India, including Rajasthan, is deemed taxable for income tax purposes, including income accrued prior to April 1, 1950. The Court clarified that the definition of 'taxable territories' in Section 2(14-A) of the Indian Income-tax Act applies to the chargeability of income, not merely its computation. Consequently, the respondent's income for the accounting year 1949-50 was subject to income tax, affirming the High Court's decision to assess the income tax liability.