M/S. CARBORANDUM CO. vs C.I.T., MADRAS

The Supreme Court addressed the applicability of Section 4(1)(e) and Section 42 of the Income-tax Act, 1922, clarifying the distinction between actual accrual and deemed accrual of income. The Court held that the technical fee received by a foreign company for services rendered in India could not be deemed as income accruing in India, emphasizing that the situs of services is crucial for tax liability. The Court upheld the Appellate Tribunal's decision that only a minimal portion of the fee could be taxable, rejecting the Revenue's claim for a higher percentage of income assessment.