Summarize the following court judgment. vil Appeal No. 160 of 1950. Appeal against the judgment and Decree dated the 30th March	 1951	 of the High Court of judicature at Bombay (Chagla C. J. and Tendolkar J.) in Income Tax Reference No. 34 of 1950. C. K. Daphtary	 Solicitor General for India	 (Porus A. Mehta	 with him) for the appellant. R. J. Kolah for the respondent. December 18. The judgment of the Court 	was delivered by MAHAJAN J. This is an appeal from the Judgment of the High Court of Judicature at Bombay delivered on a reference under section 66 (1) of the Indian Income tax Act	 1922	 whereby the High Court answered the first referred question in the negative. The assessment in question concerns the year 194344. A Hindu undivided family was carrying on business in Bombay. 	 Madras and the Mysore State. Its business was taken over by a registered firm on 17th March	 1942. For the purpose of this appeal however this circumstance is not material. The case has been dealt with on the assumption that a single assessee carried on	 business from 10th October	 1941 to 8th November	 1942	 the relevant accounting year. According to the accounts of the assessee	 during this period the Mysore branch purchased goods from the Bombay head office and the Madras Branch of the value of Rs. 2	45	455. The Income tax officer estimated these purchases of the Mysore branch in British India at Rs. 3	00	000 and its profits at Rs. 75	000 on the sale of these goods in Mysore. In view of the provisions of section 42 of the Act	 half of this profit	 i.e.	 to the extent of Rs. 37	000	 was deemed to accrue or arise in British India	 because of the business connection of the non resident	 branch in British India. It was contended that the assessee being a person resident in India	 section 42 could not be invoked in the case	 because that section had application only to 446 cases of non residents. The Income tax Tribunal following the decision of the Bombay High Court	 in Commissioner of Income tax 'V. Western 	India Life	 Insurance Co. Ltd.(1)	 upheld this contention	 'and ruled that no part of the Mysore profit could be taxed in British India. At the instance of the Commissioner of Income tax/Excess Profits Tax	 Bombay City	 three questions were referred to the High Court under section 66 (1)	 the first of these being "Whether in the circumstances of the case can the profits on the sale of goods in the Mysore State be deemed to accrue or arise in British India under ' section 42 (1) of the Indian Income tax Act" The High Court returned an answer to the question ' in the negative after resettling it in these terms : "Whether on the facts and in the circumstances of the case the Income tax Officer was right in applying the provisions of section 42 (1) of the Income tax Act	 and holding that Rs. 37	500 were profits deemed to accrue in British India and in including in the assesment a portion thereof. " This appeal is before us on a certificate granted by the High Court	 and the only question canvassed here is whether section 42 (1) of the Indian Income tax Act has application to the case of a resident assesses or whether its scope is limited to a non resident assessee alone. It is common ground that if section 42 of the Act has no application to the case of a resident assessee	 the whole of the Mysore profit	 namely Rs. 75	000	 cannot be included in the assessment of the year 1943 44. On the other hand	 if such an assessee is within the ambit of the section	 in that event the sum of Rs. 37	000 or any part of it would be liable to assessment during the assessment year in question. Section 42 of the Act is in these terms: "(1) All income	 profits or gains accruing or arising	 whether directly or indirectly	 through or from any business connection in the taxable territories ' (1) [1945]13I.T.R.465. 447 or through or from any money lent at interest and brought into the taxable territories in cash or in kind or through or from the sale	 exchange or transfer of a capital asset in the taxable territories	 shall be chargeable to income tax either in his name or in the name of his agent	 and in the latter case such agent shall be deemed to be	 for all the purposes of this Act	 the assessee in respect of such income tax : Provided that where the person entitled to the income	 profits or gains is not resident in the taxable territories	 the income tax so chargeable may be recovered by deduction under any of the provisions of section 18 and that any arrears of tax may be recovered also in accordance with the provisions of this Act from any assets of the non resident person which are	 or may at any time come within the taxable territories Provided further that any such agent	 or any person who apprehends that he may be assessed as such an agent	 may retain out of any money payable by him to such non resident person a sum equal to his estimated liability under this sub section	 and in the event of any disagreement between the non resident person and	 such agent or person as to the amount to be so retained	 such agent or person may secure from the Income tax Officer a certificate stating the amount to be so retained pending final settlement of the liability	 and the certificate so obtained shall be his warrant for retaining that amount Provided further that the amount recoverable from such agent or person at the time of final settlement shall not exceed the amount specified in such certificate except to the extent to which such agent or person may at such time have in his hands additional assets of such non resident person. (2) Where a person not resident or not ordinarily resident in the taxable territories carries on business 	with a person resident in the taxable territories	 and it appears to the Income tax Officer	 that owing to the close connection between such persons the course 448 of business is so arranged that the business done by the resident person with the person not resident or not ordinarily resident produces to the resident either no profits or less than the ordinary profits which might be expected to arise in that business	 the profits derived therefrom or which may reasonably be deemed to have been derived therefrom	 shall I* chargeable to income tax in the name of the resident person who shall be deemed to be	 for all the purposes of this Act	 the assessee in respect of such income tax. (3) In the case of a business of which all the operations arc not carried out in the taxable territories the profits and gain 's of the business deemed under this section to accrue or arise in the taxable territories shall be only such; profits and gains as are reasonably attributable to that part of the	 operations carried out in the taxable territories. " Before its amendment in the year 1939 the first part of the section tin thus: "42(1). In the of any person residing out of British India	 all profits or gains accruing or arising to such person	 whether directly or indirectly	 through or from any business connection or property in British India	 shall be deemed to be income accruing or arising within British India	 and shall be chargeable to income tax in the name of the agent of any such person	 and such agent shall	 be deemed to be	 for all the purposes of this Act	 the assessee in respect of such income tax:" The rest of the section was substantially in the same terms. Inspite of its amendment in 1939 the marginal note to the section continued to refer to "non resident" as before	 though the words 'residing out of British India" were deleted from the body of subsection (1). The retention of this marginal note gave rise to conflicting decisions on the question whether the section	 in spite of the change made in its language in 1939 still continued to have application to cases of " non residents" alone. In order to clarify this matter	 by Act XXII	 of 1947	 the marginal note was amended and it now is in these terms: 449 "Income deemed to accrue or arise within British India. " It is significant that the changes made in section 42 in the year 1939 were consequential to the entire recasting of section 4 of 'the Act.	 Section 4 as it stood prior to 1939 charged income tax on all income	 profits or gains	 from whatever source derived	 accruing or arising or received in British India or deemed under the provisions of the Act to ' accrue	 or arise	 or ' to be received in British India. It further ' provided that the"income	profits and gains accruing or arising 	 without British India to a person resident in British	 ' India	 shall	 'if they are received in or brought into British India	 be ' deemed to have accrued or arisen in British India and to be income	 profits and gains	 of the year in which they are so received or brought	 notwith standing the fact that they did not so	 accrue or arise in that year. By the amendment in the year 1939	 the total income of any previous ' year of any person was defined as including 'all income	 Profits and gains from whatever source derived which a) are received or are deemed to be received in British(a) India in such year by or on behalf of such person	 or (b) if such person is resident in British India during such year	 (1) accrue or arise or are deemed to accrue or arise to him in British India during such year; or (ii) accrue or arise to him without British India during such year ; or. . (c) if such person is not resident in British India during such year	 accrue or arise or are deemed to accrue or arise to him in British India during such year;. " This legislative change in the Act made all income accruing or arising or deemed to accrue or arise in British India during the previous year to a resident the subject of a charge	 apart from income accruing or arising without British India during the previous year. 450 The term "deemed" brings within the net of chargeability income not actually accruing but which is supposed notionally to have accrued. It involves a number of concepts. By	 statutory fiction income which can in no sense be said to accrue at all may be considered as so accruing. Similarly	 the fiction may relate to the place	 the person or be in respect of the year of taxability. Section 42(1) defines what income is deemed to accrue within the taxable territories. It is only by application of this definition that one class of income "deemed to accrue to a resident within taxable territories" within the meaning of section 4(1) (b) () can be estimated. The words "In the case of any person residing out of British India" were deleted from section 42(1) during the pendency of the amendment. Bill of 1939 in the Council of State presumably with the object of making the section applicable to any person who had any income which in a primary sense arose in British India	 even though technically it had arisen abroad	 irrespective of the circumstance whether that person was resident	 ordinarily resident or not ordinarily resident. By section 8 of Act XXIII of 1941	 clause (c) was added to section 14 of the Act. No effect was to be given to this amendment before the year ending 31st March	 1943. The relevant part of section 14	 after this amendment is in these terms: "The tax shall not be payable by an assessee in respect of any income	 profits or gains accruing or arising to him within	 a Part B State	 unless such income	 profits or gains are received or deemed to be received in or are brought into the taxable territories in the previous year by or on behalf of the assessee	 or are assessable under section 12 B or section 42. " In view of these legislative changes in the provisions of sections 4	 14 and 42 of the Act	 the conclusion is irresistible that the object of recasting section 41(1) in general terms was to make the definition of "deemed income" given in the section generally applicable to all classes of assessees. This sub section has been drafted in the widest terms and there is nothing whatsoever in 451 its language residents only. Wherever the legislature intended to limit the operation of any part of this section to non residents alone	 it said so in express terms. Sub section (2) and the latter portion of sub section (1) expressly concern themselves with the case of nonresidents	 while sub sections (1) and (3) are so framed that they cover both residents and non residents. A Bench of the Bombay High Court in Commissioner 		of Income tax vs Western India Life Insurance Co.(1)	 held that notwithstanding its amendment in 1939 the section applied only to non residents. Reliance was placed	 inter alia	 on the circumstance that the marginal note appended to the section indicating that it applied to non residents alone	 had not been deleted. To avoid this criticism and to remove doubts the legislature by Act XXII of 1947 changed the marginal note also. It seems to us that any other construction of the section would create an anomaly	 inasmuch as the Part B State income failing under section 42 would not be assessable in the hands of a resident	 but it would be assessable in the	 hands of a non resident	 because the Income tax Act while it ropes in world income of a resident	 exempts income accruing within the Part B States from its ambit except when such income is received or is brought into taxable territory or comes within the ambit of section 42. Such a construction would be contrary to the policy of the Act. It is unnecessary to dwell on	 this point at any great length in view of the circumstance that the decision in 'Commissioner of Income tax vs Western India Life Insurance Co.(1)	 has been dissented from and for good reasons	 in subsequent cases. In Sutlej Cotton Mills Ltd. vs Commissioner of Income tax	 West Bengal(2 ) a Bench of the Calcutta	 High Court considered this matter at some length and reached the 	decision that sub sections (1) and (3) of section 42 	covered cases of both residents as well as non residents. The same view was taken by a Bench of the Madras High Court in Commissioner of Income tax/Excess (1) [1945]13 I.T.R.405. (2) A.I.R. 1950 Cal. 452 Profits Tax	 Madras	v	. Parasuram Jethanand (1). Again the matter was discussed in this court in Commissioner of Income tax	 Bombay vs Ahmedbhai Umarbhai & Co.(2) by	 Patanjali Sastri J.	 as he then was	 and also by Mukherjea J. in the same case. This is what Patanjali Sastri J. said on this point: "It is noteworthy that the first part of sub section (1) of section 42 providing that certain classes of ' income		 are to be deemed accrue or arise in British India is not confined in its application to nonresidents	 but is in general terms so as to be applicable to both residents and non residents. Before its amendment in 1939 the subsection began with the words 'in the case of any person residing out of British India ' which obviously restricted the application of the provision to non resident person but in its amended form the sub section has been recast into two distinctparts	 the first of which is not so restricted	 and the second part alone	 which begins with the words 'and	 where the person entitled to the income profits and gains is not resident in British India	 is made applicable 'to non resident persons	 thereby showing that the former part applies to both residents and non residents. The opening words of the first proviso also point to the same conclusion	 for these words would be surplusage if the sub section as a whole applied only to non residents. A contrary view has	 no doubt	 been expressed by a Division Bench of the Bombay High Court	 in Commissioner of Income tax vs Western India Life Insurance Co. Ltd.(3). Though reference was made in that case to the alteration in the structure of subsection (1) its significance	 as it seems to me	 was not properly appreciated. The facts that the marginal note to the whole section refers to 'non reside ' and that the section itself finds a place in Chapter IV headed 'Liability in special cases ' were relied upon as supporting the view that sub sections (1) as a whole applies only to non residents. As pointed out 'by the Privy Council in Balraj Kunwar vs Jagatpal Singh(4)	 marginal notes in an Indian statute	 as in an (1) A.I.R. 1950 Mad. (2) ; (3) (4) 26 All. 393	 406. 453 Act of Parliament	 cannot be referred to for the pur pose	 of construing the statute	 and it may be mentioned in this connection that the	 marginal note relied on has since been replaced by the words 'Income deemed to accrue ;or arise within '	 British India which makes it clear that the 'main object	 of sub section (1) was to define that expression (see section 12 (a) of Act XXII Of 1947). Nor can the title of a chapter be legitimately used to restrict the plain terms of an enactment. " The same view was expressed by Mukherjea J. 	Nothing that has been said by Mr. Kolah before us justifies reconsideration of these opinions. Mr. Kolah argued that when the world income of a resident was	 brought within the net of chargeability by section 4 in 1939 it was then wholly unnecessary to include such an assessee in the ambit of section 42. In our judgment	 this contention is fallacious. Whatever income arises in a primary sense to a resident in taxable territories is chargeable under section 4 (1) (b) (1). Hence it was necessary to make section 42 applicable to such a case. Whatever other consideration may arise in estimating the foreign income of a resident will not be applicable to income deemed to accrue within taxable territory. Moreover	 as above pointed out	 in view of the provisions of section 14 (c) resident assessees but for section 42(1) would not be liable to assessment regarding income accruing to them in Part B States	 even if there is a business connection in taxable territory. Mr. Kolah was unable to suggest any reasonable explanation for the deletion of the words "any person residing out of British India" from section 42(1) as it stood before 1930. The Only purpose in deleting these words could be to bring residents within the a ambit of the section. There is no reason whatsoever for not giving to the plain words of the section the meaning that on the face of it they bear. For the reasons given above we are of the that the answer by the High of Bombay to the first question referred to it was wrong. We therefore allow this appeal with costs and answer 7 93 S.C.India/59 454 this question referred to the High Court in the affirmative. Appeal allowed.

A Hindu undivided family was carrying on business in Bombay	 Madras and the Mysore	 being treated as a single assessee and its relevant accounting period was 10th October	 1941	 to 8th November	 1942. During this period	 the Mysore branch purchased goods from the Bombay head office and the Madras branch of the value of Rs ' 2 lakhs odd. The In tax 'Officer estimated these purchases of the Mysore in British India at Its. 3 lakhs and its profits at Rs 75	000 on the sale of these goods in Mysore. In view of the provisions of section 42 of the Indian Income tax Act	 half of this profit	 i.e.	 to the extent of Rs. 37	500	 was deemed to accrue or arise in British India because of the business connection of the L non resident branch in British India: Held	 that	 on the facts and circumstances of the case	 the Income tax Officer was right in applying the provisions of section 42 1 of the Income tax Act and holding that RS. 37	500 were deemed to accrue in British India and in including in the assessment a portion thereof. Held also	 that section 42 sub sections (1) and (3)	 cover Cases of both residents as well as non residents. Commissioner of Income tax vs 'Western India Life Insurance Co. dissented from. Sutlej Cotton Mills Ltd. V. Commissioner of Income tax	 West Bengal (A.I.R. 1950 Cal. 551)	 Commissioner of Income tax/Excess Profits Tax	 Madras vs Parasuram Jethanand (A.I.R 1950	Mad. 631)	 Commissioner of Income tax. Bombay V. Ahmedbhai Umarbhai & Co. ([1950] S.C.R. 335)	 referred to. 445