TaxTMI 
TaxTMI 
1971 (9) TMI 21
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....een received by the assessee outside the taxable territories. " When Mr. R. H. Dhebar, learned counsel for the revenue, opened the appeals, a preliminary objection was raised by Mr. N.D. Karkhanis, learned counsel for the assessee-respondent, that the certificates granted by the High Court are not proper and as such the appeals are not maintainable. The nature of the preliminary objection will be referred to by us in due course. As we are accepting the preliminary objection, we will only refer to the facts in so far as they are relevant for holding that the certificates granted are not proper and as such the appeals are not maintainable. The assessee-respondent is a firm consisting of three partners, namely, Sohanmal, Mehtabchand and Allahdin. Sohanmal and Mehtabchand are also the two coparceners of a Hindu undivided family. The said family had got its own business firm known also by the name of the assessee, M/s. S. Zoraster and Company. The assessee-firm, as well as the joint family firm, were both situated in Jaipur, which was outside the taxable territories at the relevant period. The assessee had business dealings with the Government of India. In respect of the goods suppl....
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....on given by the assessee regarding the mode of despatch of cheques. The High Court, in its order under attack, noted the findings recorded by the Tribunal, namely, that the cheques were received by the assessee at Jaipur, but collected at Bombay, and that it is not established how the cheques were sent to the assessee by the Government of India. The revenue contended before the High Court that the amounts covered by the cheques in question must be considered to have been received by the assessee in the taxable territory, either at Bombay, on the basis that the amounts covered by the cheques were realised at that place, or at Delhi, on the ground that the cheques must be considered to have been received by the assessee at that place where the cheques were posted, as the post office is to be considered the agent of the assessee. The High Court first considered the question as to what is the effect of payments made by the Government to the assessee by means of cheques. After a reference to certain decisions of this court, the High Court held that the mere fact that the cheques were realised at Bombay is of no consequence. In the particular circumstances of the case, the High Court i....
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....were received by the assessee in Jaipur. Another ground was taken that the evidence on record establishes that the cheques were issued and sent to the assessee at his request by post. The learned judges who dealt with the applications for grant of certificates were different from those who dealt with the main reference. By order dated July 13, 1968, the High Court granted the certificates that the cases are fit for appeal to this court. Before the learned judges, the revenue contended that the assessee must be considered to have received the amounts covered by the cheques in the taxable territories on two alternative grounds : (1) that the payments by cheques made by the Government of India from Delhi to the assessee at Jaipur were not made at Jaipur where the cheques were received by the assessee but at Bombay where the cheques were cashed, or (2) the cheques were posted by the Government of India at Delhi to the address of the assessee at Jaipur and as the post office acted as an agent of the assessee in receiving cheques the payment was made at Delhi and not at Jaipur. Regarding the first ground the learned judges held " that it has been convincingly negatived by the learned....
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.... of money to the assessee in Delhi and that is the position regarding the present assessee. Ultimately, the learned judges held that the question of law which really arises in the present case is whether a presumption could be drawn under the circumstances of the case that the cheques were sent by the Government to the assessee by post or whether the fact of sending the cheques by post must be positively proved by the revenue. After referring to section 114 of the Indian Evidence Act and in particular to illustration (f) thereof, the learned judges observed that in the case on hand the cheques should have been sent by the Government from Delhi to the assessee either by post or by the messenger and that as it is not the case of either party that the cheques were sent by the messenger, the only conclusion to be drawn is that the cheques must have been sent by post. Any other conclusion, according to the learned judges, apart from being improbable will also be absurd and, therefore, the only alternative on which one can proceed is that the cheques must have been sent by post. There is a discussion how the risk can be avoided by the cheques being drawn in a particular manner when they ....
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....hich finding has been accepted by the High Court when answering the reference. In view of this finding of fact, according to the learned counsel, there is no question of any presumption arising under section 114, illustration (f), of the Evidence Act, coming into play. The counsel further urged that the learned judges have granted a certificate on a matter which did not arise for consideration and which was not in dispute before the High Court when it answered the reference and which point had not even been raised in the applications for grant of certificate. When there was a categorical finding that the Government placed no evidence regarding the posting of cheques at Delhi, the reasoning of the learned judges when dealing with the applications for grant of certificates that the cheques must have been posted at Delhi, is opposed to evidence. Further, it was a conclusion which cannot be reached at the stage of granting a certificate, being quite contrary to that reached by the High Court when dealing with the reference. In short, according to the learned counsel, the certificates have been granted on a point which does not arise for consideration in the appeals. Mr. Dhebar, learn....
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....l on record and the discussion on facts and law contained in the judgment of the High Court which dealt with the appeal or reference or any other proceeding, as the case may be. Regarding the question that the assessee may be considered to have received the payments at Bombay, the learned judges have quite rightly declined to grant a certificate on the ground that the point is covered by the decisions of this court and that no substantial question of law arises. As we have already pointed out, the certificate has been granted by the learned judges on the basis that the general question whether a presumption under section 114, illustration (f), of the Evidence Act, can be raised is of great importance and that it is likely to arise in many future cases not restricted to income-tax. It should be remembered that this court should not be invited to decide any question of law much less the substantial question of law purely in the abstract. Such question of law must reasonably arise on the basis of the material on record. Further, the substantial question of law, in order to be certified as fit to be decided by this court must the facts of a particular case. With great respect to th....