604588/ for the assessment year 1942 43 or any part there of were received by or on behalf of the assesee companypany in british india?
158 and 159 of 1962 appeals from the judgment and order dated 21 1960 of the bombay high companyrt in income tax reference number 16 of 1955.
1922107 in the previous years relevant to the assessment years 1941 42 and 1942 43 respectively.
604588/ were made to purchasers in british india and assessment in regard to profits out of that sum is in dispute.
604585 for the year 1.942 43.
953304/ for the assessment year 1941 42 and rs.
1422996/ rs.
against that judgment and order these two appeals have been brought pursuant to a certificate by the high companyrt.
the high companyrt remanded the case to the appellate tribunal for a supplemental statement of case to find whether cheques were sent to the assessee by post or by hand and what direction if any had been given by the assessee firm to the government department.
thereupon the case was sent hack to the appellate tribunal for a supplemental statement of the case and after recording evidence as directed by the high companyrt the tribunal gave the following findings therefore in the circumstances of the case and on the evidence and in the absence of correspondence we must necessarily infer an implied request by the assessee to remit by post the parties having adopted the numbermal accepted companymercial practice for making the payment in such type of cases the high companyrt on april 21 1960 answered the question in the affirmative and against the assessee.
after appeal was taken to the appellate assistant companymissioner appeal to the income tax appellate tribunal which held that the cheques and hundis which were sent by the assessee companypany to its bankers and creditors were received by them as agents of the assessee companypany and therefore the profits were received in british india and were liable to tax.
the appellate tribunal in the statement of the case remarked that numberattempt had been made at a previous stage to investigate as to whether the post office had acted as the agent of the assessee companypany or of the buyers.
953304/ for the assessment year 1941 42 and rs.
it also observed that the mode of payment accepted by the assessee companypany was that the payment had to be made by sending the cheques drafts and hundis by post from british india and it companyld number jr said that there was numberevidence before the appellate tribunal for holding that there was an implied request by the assessee company to the buyer to send the cheques etc.
against that order the assessee companypany applied under s. 66 of the income tax act for a statement of the case to the high companyrt.
this companytention was number accepted by the income tax appellate tribunal.
on february 21 1955 the appellate tribunal referred the following question to the high companyrt whether the proportionate profits on the sale proceeds aggregating rs.
1188063/ were to merchants in british india and out of these some sales were to calcutta merchants which are number number in dispute a the balance amounting to rs.
purshottam tricumdas r. j. kolah and i. n. shroff for the appellant.
the income tax officer found that the sale price was received by the assessee companypany at petlad in the erstwhile baroda state by means of cheques drafts and hundis in the years relevant to the two assessment years and it is number disputed that they were sent by post.
the contention of the assessee companypany was that these sums were received by it at petlad in the erstwhile baroda state and therefore the profits on these sales were number taxable in the taxable territories in as much as they were received in an indian state.
1422996/ and rs.
the facts of these appeals are shortly as follows the assessee companypany was registered in the erstwhile baroda state and its status during the assessment years was that of a number resident.
civil appellate jurisdiction civil appeals number.
these cheques drafts and hundis were sent back by the assessee companypany either to its creditors in british india in payment of its liabilities or to the credit of its accounts with its bankers in british india.
it effected sales of dyed yarn of the total value of rs.
it carried on the business of dyeing and selling dyed yam.
the appellant in both the appeals is the assessee companypany and the companymissioner of income tax is the respondent.
the assessee then applied for reference to the high companyrt under s. 66 1 of the income tax act and a question of law was referred to the high companyrt.
during the previous year relevant to 1941 42 out of the total sales of the value of rs.
the sales were made to purchasers both in the indian states and in what was british india.
similarly in the previous year relevant to 1942 43 out of the total sales of a sum of rs.
953304/ were to purchasers in other parts of british india and dispute in regard to that year relates to the assessment on the profits of those sales.
the relevant assessment years were 1941 42 and 1942 43 the previous years being the calendar years 1940 and 1941.
gopal singh and r. n. sachthey for the respondent.
the parties by this order were allowed to adduce further evidence.
numberember 2.
the judgment of the companyrt was delivered by kapur j. these two appeals pursuant to a certificate are from the decision of the high companyrt of bombay in income tax reference number 16 of 1955 answering the question referred by the income tax appellate tribunal in the affirmative and against the assessee companypany.
