1941 (9) TMI 14

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.... this Court the Income Tax Commissioner was directed to state a case upon the following questions :- (1) Whether the assessee is resident in British India and carries on business here, and (2) Whether the assessee has been rightly taxed under the Indian Income Tax Act." The Commissioner has suggested that the answers to both these questions should be in the affirmative. The assessee is a firm which owns a business styled as "Sri Hardeo Salt Company.". This firm consists of four brothers who appear to be joint, namely, Pearey Lal, Juggernath Prasad, Dwarka Prasad and Srinath Prasad. These four brother admittedly reside in Muttra in the United Provinces. The business of the firm is that of selling salt which is obtaine....

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....essee is resident in British India, was a question that this Court should not have asked. At first sight this would appear to be pure question of fact; but this Court asked the question because it was not clear as to the evidence upon which the Income Tax authorities had arrived at their findings. That evidence is clearly set out, and there is undoubted material to support the finding that the assessee is resident in British India. I must, however, point out that the Income Tax authorities and the Commissioner have referred to a large number of documents which cannot possibly be admissible in evidence against the assessee. However, there is a clear admission by one of the partners that the properties of the firm were the four brother here r....

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....t Srinath is one of the most important, if not the managing members of this firm. Mr. S. K. Mazumdar who has argued this case very fully has contended that all that the assessee has at Muzaffarpur is a canvassing agent : but the facts which I have set out strongly suggest that the activity at Muzaffarpur is the activity of a branch of the firm and not the activity of a mere agent soliciting orders. Again the order forms used by the assessee at Muzaffarpur show that orders are accepted at Muzaffarpur and contracts for the sale and delivery of salt concluded there. It is true that these orders are sent to Rajputana, but that is inevitavble because they have to be executed at Rajputana. The salt lake is situate there and not at Muzaffarpur, an....

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.... are made not in British Indian but in Rajputana outside the confines of British India. In my view the case of Granger & Son v. Willam Lane Gough (1896) A. C. 325 is clearly distiguishable from the present case. Lord Herschell in his speech at page 333 stresses the fact that the agent in the United Kingdom did not entered into any contract but merely forwarded offers to the foreign merchants) in Finance. At page 333 he states :- "Taking the finding together, I think it clear that no contracts to sell wine were every made by the appellants on behalf of Roederer. All that they did was to transmit to him the orders received, and until he had agreed to comply or complied with them there was no contract. He was under no obligation to th....