It may be pointed out that in the companytract of sale between the assessee and the Government of India, the following clause was included to determine the system of payment 21.
The special leave granted by this companyrt is limited to the question whether the High Court had jurisdiction in this case to call for the supplemental statement.
They are Kirloskar Bros. Ltd. v. Commissioner of Income tax 1952 21 I.T.R.82 and Ogale Glass Works Ltd, v. Commissioner of Income tax I. Tax Reference No.
This companytention was number accepted by the Income tax Appellate Tribunal, Delhi.
The companytention of the assessee was that this income was received at Jaipur outside the then taxable territories.
In the later case, the Department had to deal with a number resident companypany which, at all material times, was situate at Bhavnagar, one of the Indian States.
The assessee then applied for a reference to the High companyrt under section 66 1 of the Income tax Act, and by its order dated December 10, 1952, the Income tax Appellate Tribunal referred the following question for the decision of the High Court Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in the taxable territories ?
In Kirloskar Bros. Ltd. v. Commissioner of Income tax 1952 21 I.T.R. 82 , it was held that the mere posting of the cheque in Delhi was number tantamount to the receipt of the cheque in Delhi, because the payee had number requested the Government to send the cheque by post.
The Tribunal held that the cheques having been received at Bhavnagar the income was also received there.
10,80,658 0 0 and in the assessment year 1943 44, Rs.
These views found further amplification, were applied in two other cases by the Bombay High Court.
The supplies to Government were made for Jaipur by the assessee, and payment was by cheques which were received at Jaipur and were endorsed in favour of the joint Hindu family, which acted as the assessees bankers.
System of payment Unless otherwise agreed between the purchaser and the companytractor payment for the delivery of the stores will be made by the Chief Auditor, Indian Stores Department, New Delhi, by cheque on a Government Treasury in India or on a branch of the Imperial Bank of India or the Reserve Bank of India transacting Government Business.
These cheques were received in Jaipur.
In Ogale Glass Works case I. Tax Reference No.
In both these cases, it was held that unless the payee expressly companystituted the post office as his agent, the mere posting of the cheque did number companystitute the post office the agent of the payee, and that the amount of the cheque was also received at the place where the cheque was received.
The Tribunal had stated in the statement of the case as follows The payment was made by the Government of India by cheques drawn on the Reserve Bank of India, Bombay Branch.
This was expressly found to be so by this Court in these words The only ground urged by the Revenue at all material stages was that because the amounts which were received, from the merchants or the Government were received by cheques drawn on banks in British India which were ultimately encashed in British India, the monies companyld number be said to have been received in Bhavnagar though the cheques were in fact received at Bhavnagar.
In Sir Sobha Singh v. Commissioner of Income tax 1950 18 I.T.R. 998 , it was held by the Punjab High Court that where cheques were given to a bank for purposes of companylection, the receipt of the money was at the place where the bank on which the cheque was drawn was situated.
17,45,336 0 0 were assessed as its income by the Income tax Officer, Contractors Circle, New Delhi.
A deed of partnership was also executed on March 16, 1944.
The assessee, Messrs. S. Zoraster Co., Jaipur, companysists of three partners.
In dealing with the Reference, the High Court passed an order under section 66 4 of the Income tax Act observing it would be necessary for the Appellate Tribunal to find, inter alia, whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, had the assessee firm given to the Department in the matter.
Two of them are companyarceners of a joint Hindu family, and the third is a stranger.
19 of 1949of the Bombay H.C. decided on September 17 1951 , the Bombay High Court asked for a supplementary statement of the case from the Tribunal as to whether there was any express request by the assessee that the cheque should be sent by post, and held that as there was numbersuch express request, the receipt of the money was number where the cheque was posted but at the place where the money was received.
19 of 1949 of Bombay H.C. decided on September 17 1951 .
Cheques in payment for supplies to Government were sent from British India to Bhavnagar.
In doing so, the Tribunal followed the Bombay decision in Kirloskar Brothers case 1952 21 I.T.R. 82 .
They had formed this partnership in June, 1940, for the manufacture and sale of blankets, felts and other woollen articles.
The assessee entered in to companytracts with the Government for the supply of goods, and in the assessment year 1942 43, Rs.
Jagdish Mills case and New Jehangir Vakil Mills case were decided by this companyrt on the same day.
Later, the principle was extended still further by this companyrt in Jagdish Mills case .
The Department companytended in the case that though the cheques were received at Bhavnagar, they were, in fact, cashed in British India and until such encashment, income companyld number be said to have been received but that on encashment in British India, the receipt of income was also in British India.
Hidayatullah, J. This appeal, by special leave of this Court, is against the judgment and order dated March 24, 1955, of the Punjab High Court by which the High Court, purporting to act under section 66 4 of the Indian Income tax Act, called for a supplemental statement of the case from the Income tax Appellate Tribunal.
