The Commissioner of Income tax has number preferred this appeal with a certificate of fitness from the High Court.
The assessee companypany owns chromite mines in Mysore State.
of the margin due to be paid by telegraphic transfer through London on receipt of information as to assay and outturn which should be submitted within a month after the arrival of the steamer at destination, Charges for such telegraphic transfer for account of beneficiary.
The companytracts for sale to American purchasers are signed by W. R. Grace Co., presumably in America and by Oakley Bowden Co. Madras , Ltd., in Madras.
of the amount of the provisional invoice payable at sight in the case of European companytracts and 80 per cent.
A very small quantity of goods was sold F.O.B. Marmagoa and the same need number be companysidered here.
Balance on ascertainment of weight and analysis to be paid in London to Bowden Oakley Co., Ltd., within 10 days of the final invoice, based on outturn weights and assays.
assessee companypany in London.
The sales to purchasers in America are effected through Messrs. W. R. Grace Co., who buy for undisclosed principals.
Letter of credit for eighty per cent.
Being informed of the opening of such credit the Eastern Bank Ltd., London sent intimation to the Eastern Bank Ltd., Madras, and the latter in its turn used to pass on the intimation by letter addressed to the assessee companypany.
The Tribunal by its order dated the 22nd January, 1948, came to the companyclusion that the sales took place outside British India and that the money in respect of such sales was also received by the agent of the.
Appeal from the Judgment and Order dated the 29th day of March, 1951, of the High Court of Judicature at Madras in Case Referred No.
The buyers Bank in due companyrse used to pay the amount of the bill of exchange to the Eastern Bank Ltd., London.
203 and used to draw a bill of exchange on the buyers Bank, where the letter of credit had been opened, for 90 per cent.
The companytracts for sale to European purchasers are signed by Bowden Oakley Co. Ltd., in London.
Chrome ores are extracted from the mines and companyverted into a merchantable product and then sold to buyers mostly outside India.
The terms of payment under the European companytract were as follows Payment.
The assessee companypany went up on appeal to the Income tax Appellate Tribunal.
in the affirmative both the referred questions which were expressed in the following terms Whether on the facts and in the circumstances of the case the profits derived by the assessee companypany from sales made to European and American buyers arose outside British India ?
On appeal, the Appellate Assistant Commissioner companyfirmed the assessment.
The bill of exchange together with the relative bill of lading endorsed in blank by the assessee companypany and the provisional invoice was then negotiated with the Eastern Bank Ltd., Madras, the bankers of the assessee companypany, Who used to credit the assessee companypany with the amount of the bill of exchange.
On the facts stated above the Income tax Officer assessed the assessee companypany on the entire profits in respect of these sales on the footing that they arose and were also received in British India.
Balance estimated twenty 20 per cent.
On receipt of such intimation the assessee companypany placed the companytracted goods on board the steamer at Madras and obtained A bill of lading in its own name.
7,300 seven thousand three hundred pounds sterling in all, available by delivery to us on or before 15th January, 1940, of the following documents Towards, the end of the letter the Eastern Bank Ltd., Madras, used to write that they were prepared in our options as customary to negotiate drafts drawn in terms of the arrangement provided that the documents as above mentioned appear to us to be in order.
A specimen of such letter is also set out in the order of the Appellate Tribunal.
Thereafter, on arrival of the goods and after weighment and assay, the sale price was ascertained and the balance of price, after deducting the payments made against the bill of exchange, used to be paid to the Eastern Bank Ltd., London, which was the assessee companypanys agent and banker in London.
of the amount of the provisional invoice at 90 days sight in the case of American companytracts and in either case the bills of exchange used to be drawn in favour of the Eastern Batik Ltd., London.
ninety per cent of the Provincial sic Invoice against documents.
Ganapathy Iyer and M. S. K. Aiyangar for the respondent.
Specimen forms of companytracts with European purchasers and those with American purchasers are set out in the order of the Tribunal dated the 22nd January,1948, out of which the present reference arises.
117 of 1953.
CIVIL APPELLATE JURISDICTION Civil AppealNo.
As already mentioned, the shipments were made principally at Madras Port.
A very small proportion of the total sales is effected in India and for the purposes of this case may be left out of companysideration.
Provision was made for weighment, sampling and assay of goods at destination.
15, Armenian Street, Madras.
K. Daphtary, Solicitor General for India G. N. Joshi, with him for the appellant.
The facts leading up to the reference as found by the Income tax Appellate Tribunal are shortly as follows The assessee companypany is a private limited companypany registered in the Mysore State under the Mysore Company Regulations and has its registered office at Sinduvalli in Mysore State.
The Judgment of the Court was delivered by DAS J. This is an appeal from the judgment pronounced by the High Court of Judicature at Madras on the 29th March, 1951, on a companysolidated reference by the Income tax Appellate Tribunal under section 66 1 of the Income tax Act whereby the High Court answered.
The Eastern Bank Ltd., Madras, then forwarded the documents to the Eastern Bank Ltd., London, who used to present the bill of exchange to the buyers Bank in London and upon the bill of exchange being accepted the Eastern Bank Ltd., London, used to deliver the bill of lading and the invoice to the buyers Bank.
The management and companytrol of the assessee companypany was vested in Messrs. Oakley Bowden Co. Madras Ltd., another private limited companypany incorporated under the Indian Companies Act, having its registered office at No.
or 90 per cent.
The Commissioner of Income tax thereupon applied to the Appellate Tribunal requiring the latter to state a case and refer certain questions of law said to rise out of the order of the Tribunal.
Thereafter, the assessee companypany used to make out a provisional invoice on the basis of the bill of lading weight and companytract price for 48 per cent Cr.
Whether on the facts and in the circumstances of the case the profits derived by the assessee companypany from sales made to European and American buyers were received outside British India ?
The companyrse of dealing as found by the Appellate Tribunal was as follows.
Before the goods were actually shipped, the buyers used to open a companyfirmed irrevocable Bankers credit with some first class bank in London.
Provisional invoice to be based on Bill of Lading weight and companytract price for 48 per cent.
The above Questions of law arose out of proceedings for the assessment to income tax of the respondent, Mysore Chromite Ltd. hereinafter referred to as the asseessee companypany , for the years 1939 1940, 1940 1941, 1941 1942 and 1942 1943.
The letter companycluded with a warning that the advice was given for your guidance and without involving any rosponsi bility on the part of this Bank.
44 of 1948.
November 1.
in such companymunication the Eastern Bank Ltd., Madras, informed the assessee companypany that I in accordance with advices received by letter from our London Office, a companyfirmed and irrevocable credit has been opened in your favour by Messrs. Morgan Grenfell Co., Ltd., London, for account of Messrs. W. R. Grace Co., New York, for a sum number exceeding pound.
Under both forms of companytracts the price was F.C.B. Madras or Marmagoa.
The companyresponding terms of payment under the American companytracts were as follows Payment.
The European companytracts also provided for insurance by buyers but numbersuch provision was made in the American companytracts.
of invoice value to be available against drafts at ninety 90 days sight with documents attached to be opened immediately in London in favour of the seller.
80 per cent.
