Judgement

SHAH, J.:- The appellant is a private trust, and was within the meaning of Ss. 4-A and 4-B of the Income-tax Act, 1922 resident and ordinarily resident within British Indian in 1948. The appellant held 1000 shares in an investment company styled Home Mehta and Sons Ltd. (hereinafter called the Company ) which carried on the business of investing in shares in companies registered in British India and in the former Indian States Dividends from British Indian companies were received by the Company at its registered office at Bombay, and dividends from the Indian States companies were received by the Company at its registered office at Billimora in the State of Baroda.

2. In the calendar years 1948 and 1949 the appellant received at Billimora Rs. 65,000 and Rs. 2,10,000 respectively as dividend in respect of shares held by it in the Company. The 2nd Income-tax Officer, A-I Ward, Bombay, upheld the claim of the appellant that its dividend income received from the Company at Billimora had accrued or arisen in the Baroda State, and as the income was not brought into British India it was exempt from liability to tax by virtue of S. 14 2) (c)of the Income-tax Act. The Commissioner