Burden of proving taxable receipt of sale proceeds rests on the revenue where place of receipt remains uncertain.

For purposes of section 4(1)(a) of the Indian Income-tax Act, 1922, the department had to prove that the cement sale proceeds were received, or deemed to be received, in British India or the taxable territories by or on behalf of the assessee. A mere absence of evidence of receipt at Bikaner was insufficient to displace the assessee's claim, because the burden lay on the department. As the record did not allow a final finding on the place of receipt and the marketing agreement terms remained relevant, further factual inquiry was required before a conclusive tax determination could be made.

---

---

Issues: Whether the sale proceeds of cement sold through the Bikaner sub-agents were received in British India or in the taxable territories so as to attract section 4(1)(a) of the Indian Income-tax Act, 1922.

Analysis: The department had to establish that the sale proceeds were received or deemed to be received in the taxable territories by or on behalf of the assessee. The rejection of the assessee's claim merely on the ground that there was no evidence of receipt at Bikaner was unsound, because the burden of proving taxable receipt lay on the department. The record did not permit a final finding on where the sale proceeds were actually received, and the matter required further factual inquiry, including the terms of the relevant marketing agreement.

Conclusion: The question was answered in the negative and in favour of the assessee, but the issue was remitted for further factual investigation before a final determination could be made.

---