RM. RAMANATHAN CHETTIAR ETC. vs COMMISSIONER OF INCOME TAX, MADRAS

The Supreme Court held that under Section 4(1)(c) of the Income-tax Act, 1922, a non-resident partner of a resident firm cannot exclude from his total income the share of profits accrued outside taxable territories. The Court clarified that while Section 4(1)(c) generally excludes foreign income for non-residents, it is subject to Section 23(5)(a), which mandates inclusion of the partner's share in the firm's profits for tax assessment. The appeal was dismissed, affirming the inclusion of foreign income in the partner's total income.