THE COMMISSIONER OF INCOME-TAX, BOMBAY vs S. K. F. BALL BEARING CO., LTD.

The Supreme Court held that under Section 4(1)(a) of the Indian Income-tax Act, 1922, the liability to pay income tax arises upon the receipt of income, and the determination of whether the income was received in the taxable territory depends on where the price was received. The Court ruled that profits were deemed received by the respondent company on behalf of foreign corporations for all sales of consigned goods, regardless of whether remittances were made before or after the recovery of sale proceeds. The High Court's conclusion that tax liability only arose for remittances made after recovery was overturned.