Accrual of sale proceeds turned on passage of title and place of payment in endorsed railway receipt sales.

In sales of goods dispatched f.o.r. destination with railway receipts drawn to self and later endorsed to purchasers, the decisive questions were where title passed and where the price became payable for section 4A(6)(b) of the Income-tax Act, 1922. On the facts found, the bank collected the hundis as agent of the assessee, and the goods were treated as passing to the customers in Part A and C States. The sale proceeds were therefore regarded as accruing in those States, rather than at the place of dispatch.

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Issues: Whether the property in goods sold against railway receipts drawn in the name of self and endorsed to purchasers in Part A and C States passed to the customers there, so that the sale proceeds accrued in those States for the purpose of section 4A(6)(b) of the Income-tax Act, 1922.

Analysis: The goods were dispatched f.o.r. destination, the railway receipts were drawn in the name of self and then endorsed to the purchasers, and the hundis were not shown to have been taken over by the bank as purchaser. On the facts found, the bank collected the hundis on behalf of the assessee as agent. The decisive factor was where the title to the goods passed and where the price became payable, not the mere place from which the goods were dispatched.

Conclusion: The property in the goods passed to the customers in Part A and C States and the income accrued there. The issue is answered against the assessee and in favour of the Revenue.

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