As per what I have read so far - 

The intention of introducing the source rule was to bring to tax interest, royalty and fees for technical services, by creating a legal fiction in section 9, even in cases where services are provided outside India as long as they are utilized in India. The source rule, therefore, means that the situs of the rendering of services is not relevant. It is the situs of the payer and the situs of the utilization of services which will determine the taxability of such services in India.

So if we consider the source rule, all the income which has its source in India is deemed to accrue or arise in India.

Most of the explanations as to that of interest, salary to embassy officials etc. fit into this line of logic. But if we consider - interest on borrowing for the purpose of buying shares in India we find that its not deemed to accrue or arise in India as per the statute. Even if we consider and pension to a person who is a retired Govt employee actually arises beacuse he was employed by Indian Govt. So why is it not deemed to accrue or arise in India? 

Will be relieved with a correct and prompt reply,

SAHIL