Receipt of cheque by post can amount to income received in British India when payment by cheque is contemplated.

Where a contract and bills contemplated payment by cheque, and cheques were posted from Delhi and received by the assessee by post in Aundh, the post office was treated as the assessee's agent for transmission. On that footing, the payment was regarded as received in British India for income-tax purposes. The analysis also notes that, once the cheques were duly honoured, payment related back to the time and place of delivery. The legal effect was that receipt of the cheque by post in Delhi amounted to receipt of income in British India within the meaning of Section 4(1)(a) of the Indian Income-tax Act.

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Issues: Whether the sale proceeds represented by cheques drawn in Delhi and received by the assessee by post in Aundh were received in British India within the meaning of Section 4(1)(a) of the Indian Income-tax Act, and whether such posting constituted receipt of income in British India.

Analysis: The contract itself provided for payment by cheque, and the assessee's bills specifically requested remittance by cheque on a bank in Bombay. The cheques were in fact posted from Delhi and received by the assessee by post. On the surrounding course of business and the express request to remit by cheque, the post office was treated as the assessee's agent for transmission, and the Government discharged its obligation by making payment in the prescribed manner. Even apart from that, once the cheques were duly honoured, payment related back to the time and place of delivery. The legal effect was that the receipt of the cheques through post in Delhi amounted to receipt of payment there.

Conclusion: The assessee received the income in British India within the meaning of Section 4(1)(a) of the Indian Income-tax Act; the question was answered in the affirmative and the Revenue succeeded.

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