Receipt through collecting bank treated as receipt where collected; High Court cannot reopen Tribunal facts in tax reference.

Receipt of contract profits through a bank acting only as the assessee's collecting agent was treated as receipt, or deemed receipt, at the place where the bank collected the money, so income was attributable to British India under section 4(1)(a) of the Income-tax Act, 1922. In a tax reference under section 66, the High Court's role was confined to answering the question referred on the facts stated by the Tribunal; it could seek a further statement only if the case stated was insufficient, and it could not reopen the evidence or challenge the Tribunal's factual findings. The procedural objection was therefore rejected.

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Issues: (i) Whether the profit from contracts executed in Bhopal State was received or deemed to be received in British India within the meaning of section 4(1)(a) of the Income-tax Act, 1922. (ii) Whether the High Court could go behind the facts stated by the Appellate Tribunal or direct a supplemental statement on the ground that the findings were unsupported by evidence.

Issue (i): Whether the profit from contracts executed in Bhopal State was received or deemed to be received in British India within the meaning of section 4(1)(a) of the Income-tax Act, 1922.

Analysis: The cheques were issued on the Reserve Bank of India at Bombay and, on receipt by the assessee, were sent to the Imperial Bank of India, Bhopal, for collection. Payment through a bank acting merely as collecting agent amounts to receipt when and where the money is collected by that agent. On the facts stated, the receipt was therefore attributable to British India at Bombay.

Conclusion: The profit was received or deemed to be received in British India, and the answer to the question was in the affirmative, against the assessee.

Issue (ii): Whether the High Court could go behind the facts stated by the Appellate Tribunal or direct a supplemental statement on the ground that the findings were unsupported by evidence.

Analysis: Under section 66 of the Income-tax Act, 1922, the High Court's function is confined to the question referred and the statement of the case supplied by the Tribunal. The Court may seek a further statement only if the existing statement is insufficient to answer the question, but it cannot reopen or test the evidentiary support for the Tribunal's findings or raise a new issue suo motu.

Conclusion: The Court declined to remand the matter for a supplemental statement and treated the Tribunal's factual statement as binding for the reference.

Final Conclusion: The reference was answered in favour of the Revenue by holding that the income was taxable on receipt in British India, and the assessee's procedural challenge to the statement of case was rejected.

Ratio Decidendi: For a tax reference under section 66 of the Income-tax Act, 1922, the High Court must decide only the question properly referred on the facts stated by the Tribunal, and receipt through a bank acting as the assessee's collecting agent constitutes receipt at the place where the bank collects the money.

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