Taxability of sale profits turned on place of sale and receipt, with no income realised in British India.

Profits from cloth sales were not taxable in British India because the sales were completed at Bhilwara, where title passed and the purchasers became owners, so the transactions were outside British India. The banker who received the sale proceeds was found to be the agent of the purchasers, not the assessee, and therefore no part of the income was realised in British India through an assessee's agent. Those findings were factual and were not disturbed, so the referred question was answered in favour of the assessee.

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Issues: Whether the profits from sales of cloth effected by the assessee were taxable in British India, and whether any part of the sale proceeds was realised in British India through an agent of the assessee.

Analysis: The goods were sold at Bhilwara, title passed there, and the purchasers became owners at that place. On the facts found, the sales took place outside British India. As to receipt of sale proceeds, the banker who received payment was found to be the agent of the purchasers and not of the assessee. On that footing, no part of the income was realised in British India. The findings on these matters were findings of fact and no basis was made out to disturb them.

Conclusion: The profits from the transactions were not taxable in British India, and the answer to the referred question was in favour of the assessee.

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