JUDGMENT - Chagla, C.J.

[1] The assessee company is incorporated in the Bahama Islands. It deals in petroleum products and soils its produce in India. Another company, the California Texas Oil Co., Ltd., (hereinafter called the California Company), is also incorporated in the Bahama Islands and this company holds all the shares of the assessee company. The assesses company made profits, and out of its profits it declared dividends which were paid to the California Company. These dividends were assessed to tax, and the question that arises on this reference is whether the tax was rightly levied. What was attempted to be done was to assess the dividend income of a non-resident company, and the assessment was not against the non-resident company, but against the asses-Bee company, who were declared the statutory agents of the California Company, under Section 43 of the Act. Now, the liability of a non-resident to pay tax is governed by Section 4 (1) (c) which provides for tax to be paid by such person who is not resident in British India during such year in respect of income, profits and gains which accrued or arose of were deemed to accrue or arise to him in British India during such

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