In these transactions, income accrued or arose to the Company in British India within the meaning of s. 4 1 .
During the relevant year of account numbersales of yam or cloth manufactured by the assessee Company were effected in British India, but all the purchases of companyton required for the factory at Pondicherry were made by the agents in British India and numberpurchases were made through any other agency.
Offers of purchase sent by brokers to Ujjain were number in any special form.
Goods were sold by the Companys salesman at Cawnpore and the sale proceeds were companylected by him at Cawnpore.
Some companymercial activity was undoubtedly carried on by the assessees in the matter of procuring orders which resulted in companytracts for sale by the numberresidents of goods to merchants at Amritsar.
But on this account numberbusiness companynection of the assessees with the number residents within the taxable territories resulted.
The Income tax Appellate Tribunal submitted a statement of case to the High Court of Punjab on the following two questions Whether the relationship between the assessee and the number resident fell within the meaning of the expression business companynection as used in S. 42 1 of the Indian Income tax Act ?
The Companys goods were also marketed in British India through brokers who were number the Companys employees and who were number canvassing orders exclusively for the Company.
Appeals by special leave from the judgment and order dated October 5, 1960, of the Punjab High Court in Income tax Reference Nos.
The Belgian Company appointed the assessees their representatives for the whole of India on companydition that the latter did number represent any other Belgian Mill or yarn producer and did number sell Belgian yam in India on their own account.
The assessee had appointed another limited Company in Madras as its companystituted agent for the purpose of its business in British India.
The activity of the assessees in procuring orders was number as agents of the number residents in the matter of sale of goods manufactured by the latter, number of procuring raw materials in the taxable territories for their manufacturing process.
veda Vyasa and B. P. Maheshwari, for the respondents.
N. Rajagopala Sastri, R. H. Dhebar and R. N. Sachthey, for the appellant.
Their activities led to the making of offers by merchants in the taxable territories to purchase goods manufactured by the number residents which the latter were number obliged to accept.
The assessees companymunicate orders canvassed by them from dealers in Amritsar to the number residents for acceptance if a companytract results and price for the goods purchased is paid by the Amritsar dealer to the number resident exporter, the assessees become entitled to companymission varying between 1 1/2 and 2 1/2 of the price.
808 and 809 of 1963.
With special leave, the Commissioner of Income tax has appealed to this Court against the opinion of the High Court in these two cases.
The assesses Company incorporated in the United Kingdom owned a spinning and weaving factory at Pondicherry in French India.
11 and 13 of 1958.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
The assessees carry on business as importers and as companymission agents or number resident exporters with two of whom we are companycerned in these appeals.
The Judgment of the Court was delivered by Shah J. R. D. Aggarwal Company called for the sake of brevity the assessees are a registered firm having their place of business at Amritsar in the State of Punjab.
The assessees had to maintain the existing customers and to secure new customers companyforming to their general terms of sales, and were to receive 21 per cent companymission on the net cash amounts arising from the accepted business companycluded by the mediation of the assessees or directly by the Italian Company with the customers.
Anvers Belgium and Filaturae Tessitura Di Tollengno Biella Italy are exporters and manufacturers of worsted woollen yarn.
By letter dated March 24, 1951 the assessees were appointed sole agents for the Italian Company for sale of worsted woollen yarns in the Indian territories terminable by one months numberice.
These two number resident exporters Comptoirs Lainiers Osterieth s.a.
In proceedings for assessment of tax in the assessment year 1952 53 the Income tax Officer, C Ward, Amritsar companyputed the income of the assasees by adding Rs.
The orders passed by the Income tax Officer were companyfirmed in appeal by the Appellate Assistant Commissioner and also by the Income tax Appellate Tribunal.
