Postal cheque payment counts as receipt when posted, making sale proceeds taxable where the cheques were sent.

Where payment by cheque is authorised or understood to be sent through the post, the post office is treated as the creditor's agent and receipt occurs when the cheque is posted. On that principle, sale proceeds remitted by cheques from British India were treated as received in British India and therefore taxable under the Indian Income-tax Act, 1922. An express written request on the bill was not necessary if the course of dealings and surrounding circumstances showed an implied arrangement for payment by post.

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Issues: Whether the sale proceeds paid by cheques sent by post from British India to the assessee were received in British India and were therefore taxable under the Indian Income-tax Act, 1922.

Analysis: The payment arrangement between the parties, the course of dealings, and the surrounding circumstances showed an implied understanding that the Government of India would discharge the liability by sending cheques by post. Where a cheque is authorised or understood to be sent by post, the post office is treated as the creditor's agent for receiving payment, and receipt occurs when the cheque is posted. The absence of an express written request on the bill did not matter, because the implied agreement could be gathered from the dealings between the parties. The cited earlier decisions applied the same principle and had held that such receipt took place in British India.

Conclusion: The sale proceeds were received in British India and were taxable; the finding was against the assessee and in favour of the Revenue.

Final Conclusion: The appeals failed and were dismissed because the cheques sent from British India constituted receipt of the sale proceeds in British India for income-tax purposes.

Ratio Decidendi: When a debtor is authorised by express or implied agreement or request to send payment by cheque through post, the post office becomes the creditor's agent and payment is received at the place from which the cheque is posted.

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