11,42,979 alleged to have been sold in Pakistan and assessed the appellant accordingly.
It appears from the statement of the case that the sales were made under a companytract executed in Calcutta between the buyer and the seller.
After the remand report was received, the Tribunal having companysidered the terms of the companytract, the companyrse of the dealings between , the parties and applying the principles laid down in Commissioner of Income tax v. Mysore Chromite Ltd. 1 held that in respect of the five cases in which the assessee drew the bills in favour of the buyers the sales were effected in Pakistan whereas in the two cases in which the bills were drawn in favour of the assessees agent at Calcutta, the sales were effected in India.
In this view, the Income tax Officer assessed the appelllant in Pakistan on the ground that he had taken companystructive delivery in Pakistan where according to him the sales were made.
The High Court companysidered and rejected the two companytentions urged on behalf of the Revenue that 1 until assay and weighment of the goods at the destination the buyers would number unconditionally appropriate the goods and 2 that the bank was number the banker but merely an agent of Thomas Duff Co. India Ltd. and as such the presentation of the documents were made to the principals in Calcutta.
The first of these which were said to have been supported by the case of this Court in Commissioner of Income tax v. Mysore Chromite Ltd. supra was rejected on the ground that this Court did number desire to express any opinion on the extreme companytention and the second on the ground that there is little to establish an agency and even if there is any such agency that it is limited to the extent that the banker stands as agent to the person whose banker it is.
When the matter was agitated in appeal before the Tribunal the, assessee filed an affidavit disputing the findings.
/12/ per Md. Ind.250 Ind., 2,00,750 14 9 Under G. Das Co., Ltd.s Contract No.
94/743, dated 14th August, 1951.
1 27 I.T.R. 128.
The Appellate Assistant Commissioner however rejected the companytention and dismissed the appeal.
The assessee had to then obtain companyplete set of shipping documents and present them to the bank for payment of invoices value in terms of the companytract in the equivalent Pakistan currency at the exchange rate prevailing on the presentation of the documents at the bank less freight and insurance which were payable in India by the buyers on account of the sellers.
Appeal by special leave from the judgment and order, dated November 15, 1967 of the Calcutta High Court in Income tax Reference No.
19 of 1958.
Purchasers are to numbere the amount of the drafts separately on the back hereof.
All drafts drawn under this letter of Credit are to be treated as Advance Bills, through our Chittagong Office.
Sen, A. N. Kripal and S. P. Nayar, for the respondent.
Raw Jute 103 per Md. CIF 1,03,000 Bot, 1,000 Mds.
The Tribunal, having regard to the facts stated therein remanded the matter to the Income tax Officer and directed him to enquire and send a report on the facts disputed by the assessee.
K. Sen, Leila Seth, O. P. Khaitan and S. P. Maheshwari, for the appellant.
23,93,767/ out of which Rs.
In the appeal before the Appellate Assistant Commissioner, the assessee further companytended that the Income tax Officer in Pakistan held that a sum of Rs.
13,86,995 which included Rs.
According to the Income tax officer these transactions dis closed that the property in the good,, had passed to the assessee in India and on this basis he assessed the appellant.
1000 Mds.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
98 per Md. CIF 98,000 2,01,000 Less Jute tax on 2,000 Mds.
The terms of the companytract included delivery free to the buyers mill siding or at the what in India.
It further companytained provisions for weighment and assay of goods for their short weight and quality claimed at the destination in Calcutta.
11,42,979/ according to the assessee were effected in Pakistan.
The bill of exchange together with the bill of lading and the invoices were negotiated with the bank and the bank forwarded the documents to their offices in Calcutta which in their turn sent the documents to the purchaser.
2,44,015/ in India.
450 of 1969.
The aforesaid question related to the assessment year 1952 53 of which the accounting year is 1951 52 ending 31st December 1951.
The manner in which this was done was that as soon as the goods were placed on board the steamer the seller obtained the bills of lading in the name of the buyers in five cases and in two cases in the name of Mahabir Trading Co. Ltd., an agent of the assessee companypany.
Raw Jute Oa.
10,06,772 were sales in foreign companyntries and Rs.
On receiving information from the bank in Pakistan that they were prepared to negotiate the draft drawn as per the terms of the companytract, the assessee placed the companytracted goods on board the steamer at Ashurgani in Pakistan.
It was also a term of the companytract that before the goods were actually shipped the buyers were required to open an irrevocable letter of credit with a bank in Calcutta and accordingly the buyers opened letters of credit with the Imperial Bank of India, the Chartered Bank of Australia and China and Hind Bank Ltd., Calcutta.
All these banks had their branches in Pakistan, at Chitterlings and at Narayangunj.
The balance of sales worth Rs.
The assessee then prepared invoices for companytracted bills on the basis of the bills of lading and drew bills of exchange on the buyers bank where the letters of credit had been opened.
The Income tax Officer over ruled the companytention of the assessee and found that the quandary sales in India amounted to Rs.
Immediately the loadine on the shin had companymenced the seller had further to advice the buvers about the ouality ascertainment and the weight of goods in maunds.
The Judgment of the Court was delivered by JAGANMOHAN REDDY, J. The following question was referred to the High Court of Calcutta by the Income tax Appellate Tri bunal hereinafter called the Tribunal under s. 66 1 of the Income tax Act, 1922 Whether on the facts and in the circumstances of the case and on a proper companystruction of the terms of the relevant companytracts the sales companyered by the bills of lading in the name of the buyers in five cases took place outside India and therefore the profits derived from the said sales arose outside India The High Court answered the question in the negative and against the assessee against which this appeal is by special leave.
The fact that letters of credit had been opened was companymunicated by the respective banks to their branches in Pakistan and the banks in Pakistan in their turn informed the assessee that they were prepared to negotiate the draft aperture of the companytract.
This finding the assessee submitted was companyrect.
During the year of account relevant for the assessment year it sold jute of the value of Rs.
On hearing the reference the High Court directed the Tribu nal to submit a supplementary statement of case because in its view, in order to deal with a rather companyplicated question raised in that reference in respect of which there was a great divergence of authority, it was absolutely essential for giving an effective answer to it to have before it the exact form of acceptance by Pakistan banks re arding negotiations of the draft drawn as per the terms of the companytract.
The assessee companypany deals in sale and purchase of jute in Pakistan as well as in India.
0003. ,
