Income deemed to accrue or arise in India [Section 9]

1. Deemed accrual or arising of income [Section 5]--Section 5 of the Act defines the scope of total income of the assessee which is to be taxed in his hands by virtue of the charging section 4. According to section 5(1)(b) of the Act, which is specifically applicable to the case of resident assessees, income which is deemed to accrue or arise to him in India is includible in the total income along with such income as actually accrues or arises in India. A similar provision has been enacted in section 5(2)(b) for non-resident assessees.

Section 9 specifies the income which shall be deemed to accrue or arise in India. The fixation embodied in this section however, does not apply to the income which actually accrues or arises to the assessee in India.

2. Meaning of the term accrue or arise--The word ‘accrue’ means ‘to spring as a natural growth’, ‘to come as an accretion or advantage by way of increase’ and is synonymous with the word ‘arise’ which is used in the sense of  “coming into existence” ‘springing or growing up by way of addition or advantage’. When the right to receive the income becomes vested in the assessee, it is said to accrue or arise.--Refer to CIT v. Ashokbhai Chimanbhai (1965) 56 ITR 42 (SC).