Passing of property in specific goods turns on intention and delivery of title documents, affecting taxable territory sourcing.

In sales of specific goods, passing of property depends primarily on the parties' intention, and section 20 of the Sale of Goods Act applies only as a presumption where the contract is unconditional and the goods are in a deliverable state. Where the bill of lading and other title documents were delivered in Bombay to representatives of the buyers, the sales were treated as completed in the taxable territories and the entire profit arose there. Where the title documents were sent to Aden and delivered outside the taxable territories, the statutory presumption was displaced by contrary intention, and the sales were not wholly concluded in the taxable territories; profit apportionment was left to the Tribunal.

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Issues: Whether, on the facts, the sales in respect of transactions in categories 3 and 4 took place in the taxable territories and whether the entire profit in respect thereof arose in the taxable territories.

Analysis: Under section 19 of the Sale of Goods Act, the passing of property in specific goods depends primarily on the intention of the parties, while section 20 raises a presumption that property passes when an unconditional contract is made for specific goods in a deliverable state. The goods in question were specific goods, and the bill of lading represented the goods during transit. For category 4 transactions, the documents of title, including the bill of lading, were delivered to the representatives of the Aden parties in Bombay, and no contrary intention was shown. For category 3 transactions, the documents of title were sent to Aden and the delivery of documents occurred outside the taxable territories, which indicated a contrary intention and displaced the statutory presumption.

Conclusion: The sales in category 4 were held to have taken place in the taxable territories and the entire profit therefrom arose in the taxable territories. The sales in category 3 were not wholly concluded in the taxable territories, and the apportionment of profits between activities in and outside the taxable territories was left for determination by the Tribunal.

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