SUTLEJ COTTON MILLS LTD. vs COMMISSIONER OF INCOME TAX, WEST BENGAL III,CALCUTTA

The Supreme Court upheld the assessment of a company under Section 14(2)(c) and Section 42(3) of the Income Tax Act, 1922, regarding remittances from native States. The Court established that in the absence of evidence to the contrary, remittances are presumed to be made from taxed income, allowing for a favorable attribution for the taxpayer. The Court dismissed the appeal, affirming that only 1/3rd of the remittances were exempt from tax, as they had already been taxed under Section 42(3).