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.
cheques on the reserve bank of india bombay were encashed.
the receipt clause in the bill used to be signed in advance on behalf of the assessee on a one anna stamp.
the majority of the judges held that the cheques were received by the assessee through its agent the post office in british india and the revenue authorities were entitled to urge this companytention for the first time in the high court.
niren de addl.
the matter then went before the third judge k. t. desai j. who agreed with j. shah j. and answered the question in the affirmative.
clause 9 of the bulk purchase order was in these terms 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.
solicitor general gopal singh and n. sachthey for the respondent.
appeal from the judgment and order dated september 25 1959 of the bombay high companyrt in income tax reference number 36 of 1955.
the assessee used to make out bills in the prescribed form.
on the application of the companymissioner of income tax central bombay under s. 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 companyrt whether the assessee companypany 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 ?
0 was one of the terms on which all the goods were supplied by the assessee.
j. c. shah j. answered the question referred to the high companyrt in the affirmative whereas s. t. desai j. answered it in the negative.
from the judgment of k. t. desai j. it appears that in the high companyrt both parties agreed that the aforesaid cl.
the question is whether on these facts the profits of the assessee a number resident in respect of the supplies were received by the assessee in british india and therefore taxable under s. 4 1 a of the indian income tax act 1922.
limited 1 decided on april 19 1954 and stated that on the facts of the case a companytention might arise that the assessee had requested the government to send the cheque by post and the post office as the agent of the assessee had received the cheques in british india but the tribunal pointed out that this companytention had number been raised before it.
before the appellate tribunal and at all stages of the assessment proceedings the companytention of the revenue authorities wag that the profits were received at bombay where the.
the receipt clause in the completed bill used to be in the following terms please pay by cheque to self on a bank at indore.
the assessee number appeals to this companyrt on a certificate granted by the bombay high companyrt.
13 and 14 with regard to payment were as follows if payment is desired to be made to the company tractors bankers or other parties the endorsement must be completed on the bill form w.s.b.
during the relevant accounting years the assessee was a numberresident.
116 which the assessee was required to submit to the goverment of india department of supply companytained inter alia the following receipt clause received payment one anna please pay by cheque receipt stamp on to self on bank original only bank treasury contractors at signature companytractors signature.
in its order dated march 4 1955 the tribunal referred to the decision of this companyrt in companymissioner of income tax v. kirloskar bros.
the reference under s. 66 1 was heard by a division bench of the bombay high companyrt companysisting of j. c. shah and t. desai jj.
the goods used to be inspected at indore by an inspecting officer of the government and the inspection certificates were issued at indore.
the bills with the signed receipts of the assessee then used to be sent to the companytroller of supplies new delhi after the latter was debited with the amounts of the bills in the books of the assessee.
civil appellate jurisdiction civil appeals number.
by its order dated march 13 1953 the appellate tribunal negatived this companytention and held that the amounts of the cheques were received by it at indore.
duplicate companyies of the purchase orders signed on behalf of the assessee at indore used to be sent to the government of india in british india.
10061011 of 1963.
there were two types of purchase orders namely 1 purchasewar order and 2 bulk purchase order.
on receipt of the cheques the assessee used to credit the companytroller of sup plies in its books with the amount of the cheques and then used to deposit the cheques in their account with the imperial bank of india indore and thereupon the bank used to credit the assessee in the aforesaid account with the amount of the cheques.
the judgment of the companyrt was delivered by bachawat j. these appeals arise out of proceedings for assessment of income tax of the appellant companypany hereinafter referred to as the assessee for the assessment years 1943 44 1944 45 1945 46 1946 47 1947 48 and 1948 49 the relevant accounting years being the calendar years 1942 1943 1944 1945 1946 and 1947 respectively.
the assessee supplied goods to the indian stores department government of india under purchase orders placed by the latter with the assessee at indore.
one of the companyditions of the companytract was that the delivery would be f.o.r.
instructions number.
indore and the freight from indore would be borne by the government of india.
it carried on the business of manufacturing textile goods at indore then situated in an indian state and had offices at indore and bombay.
on receipt of the bills the government of india used to draw cheques on the reserve bank of india bombay in favour of the assessee and used to send them by post to the assessee at indore.
s. pathak b. dutta r. j. kolah and j. b. dadachanji for the appellant.
