Section 5(1) of the Income Tax Act

Income accrues or arises to an assessee when the right to receive it vests with the assessee, not necessarily upon actual receipt.

This case establishes principles for distinguishing operating leases from finance leases and determining if leased equipment constitutes a Permanent Establishment (PE). It also clarifies that reassessment proceedings initiated on borrowed satisfaction without independent application of mind are invalid.

Income that is considered business income for tax purposes must be computed on a net basis, accounting for expenses incurred to earn that income, and cannot be taxed in India on a gross basis.

Receipts from slot chartering are considered shipping income eligible for beneficial provisions of a tax treaty, as slot hire agreements are directly or indirectly connected and an integral part of the enterprise's business of operating ships.