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TaxTMI 
TaxTMI 
TaxTMI 
1965 (11) TMI 36
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....ish India. The goods used to be inspected at Indore by an inspecting officer of the Government and the inspection certificates were issued at Indore. One of the conditions of the contract was that the delivery would be f.o.r. Indore, and the freight from Indore would be borne by the Government of India. The goods used to be despatched by railway from Indore station and the railway receipts used to be made out in the name of a representative of the Government. There were two types of purchase orders, namely, (1) purchase-war order and (2) bulk purchase order. Clause 9 of the bulk purchase order was in these terms : " 9. Payment : Unless otherwise agreed between the parties, payment for the delivery of the stores will be made on submission of bills in the prescribed form in accordance with the instructions given in the Acceptance of Tender by cheque on a Government Treasury in British India or on a branch in British India of the Reserve Bank of India or the Imperial Bank of India transacting Government business. " From the judgment of K. T. Desai J., it appears that in the High Court both parties agreed that the aforesaid clause 9 was one of the terms on which all the goods were ....
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....the amount of the cheques. The question is whether on these facts the profits of the assessee, a non-resident, in respect of the supplies were received by the assessee in British India and, therefore, taxable under section 4(1)(a) of the Indian Income-tax Act, 1922. Before the Appellate Tribunal and at all stages of the assessment proceedings, the contention of the revenue authorities was that the profits were received at Bombay where the cheques of the Reserve Bank of India, Bombay, were encashed. By its order dated March 13, 1953, the Appellate Tribunal negatived this contention, and held that the amounts of the cheques were received by it at Indore. On the application of the Commissioner of Income-tax, Central, Bombay, under section 66(1) of the Indian Income-tax,Act, 1922, the Tribunal by its order dated March 4, 1955, referred the following question of law to the Bombay High Court : " Whether the assessee-company is liable to pay tax in the taxable territories on the ground that the sale proceeds, which included the profit element therein, were received in the taxable territories. " In its order dated March 4, 1955, the Tribunal referred to the decision of this court in ....
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....ly point there argued was that the sale proceeds were received at Bombay where the cheques were encashed : see Commissioner of Income-tax v. Ogale Glass Works Ltd., Zoraster and Co. v. Commissioner of Income-tax ; see also Commisstoner of Income-tax v. Scindia Steam Navigation Co. Ltd. The decision in New Jehangir Vakil Mills Ltd. v. Commissioner of Income-tax relied on by the assessee is distinguishable. There, the question of law referred to the High Court was " whether the receipt of the cheques at Bhavnagar amounted to receipt of sale proceeds in Bhavnagar ? ", and this question was not broad enough to cover the enquiry whether there were postings of the cheques at the request of the assessee and receipts of the cheques by the assessee through the post office, in British India. The precise point decided by this court in the New Jehangir Vakil Mills case was that the High Court has no jurisdiction under section 66(4) to direct the Tribunal to collect evidence not already on the record and to make it a part of a supplementary statement of case, and this decision was followed and affirmed recently in Keshav Mills Co. Ltd. v. Commissioner of Income-tax. But, in the instant case, th....
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....India was at New Delhi, the parties must have intended that the Government would send the cheques to the assessee by post from New Delhi, and this inference is supported by the fact that the cheques used to be sent to the assessee by post. In the circumstances, there was an implied agreement between the parties that the Government of India would send the cheques to the assessee by post. Mr. Pathak argued that the assessee had requested the Government to pay money by cheques on a bank at Indore and as that request was not complied with and the Government of India sent instead cheques on the Reserve Bank of India, Bombay, there was no effective request by the assessee to the Government to send the cheque by post. But independently of any subsequent request by the assessee, the contract between the parties authorised the Government of India to pay the price by cheques drawn on the Reserve-Bank of India, Bombay, and imported a request by the assessee to the Government of India to send the cheques by post. The Government of India was entitled to ignore the subsequent request of the assessee for cheques on an Indore bank and the assessee received payments of the price as and when the c....