M.C.T.M. CHIDAMBARAM CHETTIAR vs COMMISSIONER OF INCOME-TAX, MADRAS

The Supreme Court upheld the High Court's decision regarding the applicability of Section 44D of the Indian Income-tax Act, 1922, stating that the income from assets transferred to a non-resident corporation is assessable to tax if the assessee acquires the power to enjoy that income. The Court clarified that the language of Section 44D emphasizes the consequence of the transfer rather than the identity of the transferor. It was held that the assessees, being closely related and controlling the corporation, had the requisite power to enjoy the income, thus making them liable for tax under the section.