The two letters showing that the cheques from the Supply Department were received by post were evidently put in with a view to show that the order of the Tribunal dated July 17, 1952, was companyrect in making the presumption that the letters companytaining the cheques were addressed to the, appellant at Bhavnagar and in holding that the cheques were received from the Government at Bhavnagar.
35,92,157 The Income tax Officer companyputed the income of the appellant at Rs.
2,58,987 Sale proceeds received through Tri kainlal Mahasukhram Rs.
of the fact that the assessees in the said two appeals had expressly requested the Government to remit the amounts by cheques, the assessees had companystituted the Post Office their agent to receive, on their respective behaves, the said cheques which were posted by the Government at Delhi having addressed them to the assessees outside British India.
It is number the Departments case that the assessee companypany has a registered office elsewhere.
35,92,157 as detailed below were held by the Income tax Officer to have been received in British India Cheques on the Imperial Bank issued by the Supply Department of the Government of India Rs.
In doing so, the Tribunal followed the Judgment of the Bombay High Court in the case of Kirloskar Brothers Ltd. v. Commissioner of Income tax Bombay 1 .
The receipt of money according to the Appellate,.,
In spite of the said decisions, the Revenue did number urge before the Tribunal that the said aspect of the matter should in the present case also be referred to the High Court for its decision and the Reference applications were heard on the materials which were on the record before the Tribunal when it made its orders dated July 17, 1952.
20,24,190 Other cheques received at Bhavnagar but drawn on Banks in British India Rs.
The Income tax Officer, therefore, held that the amount was received in British India.
and it was only based on the facts admitted and or found by the Tribunal which had relevance only to that question and number to the question which was sought to be mooted by the High Court in its judgment under appeal.
2,58,987 and Rs.
Assistant Commissioner, took place on actual payments by the drawee Banks and he therefore held that the said amounts were taxable under s. 4 1 a of the Act.
As regards items of Rs.
and the said Reference Applications were thereafter heard and decided by the Tribunal on November 3, 1954.
A similar statement of facts which were admitted and or found by the Tribunal was also made in regard to the assessment year 1944 45 and similar questions of law were asked to be referred as in the case of the assessment year 1943 44 except in regard to the change in the figures necessitated by the differences in the amounts received.
Being aggrieved by the said decision of the Tribunal, the respondent Commissioner of Income tax filed two applications under s. 66 1 of the Act requesting the Tribunal to draw up a statement of the case and refer the question of law arising out of the order of the Tribunal to the High Court.
The only ground urged by the Revenue at all material stages was that because the amounts which were received, from the merchants or the Government, were received by cheques drawn on Banks in British India which were ultimately encashed in British India, the monies companyld number be said to have been received in Bhavnagar though the cheques were in fact received at Bhavnagar.
The Tribunal, however, relied upon the Bombay High Court decision in Kirloskar Brothers case and held that the amount was received in Bhavnagar.
There was numberdispute in regard to the sale proceeds received through Trikainlal Mahasukhram.
Appeal by special leave from the judgment and order dated September 23, 1955, of the Bombay High Court in Income tax Reference No.
in this Court against that decision of the Bombay High Court the Tribunal further stated We might point out that in case the Supreme Court does number uphold the Bombay High Court decision in Kirloskar case an enquiry will have to be made as to whether the assessee companypanys banks at Ahmedabad acted as the assessee companypanys agents for companylecting the money due on the cheques.
16,72,693 received by the appellant by cheques from the Supply Department of the Government of India on British India Banks were taxable under s. 4 1 a of the Act.
15,67,967 made to the Government of India and other customers were received in British India within the meaning of section 4 1 a of the Indian Income tax Act.
19 of 1955.
The presumption is that the letters companytaining the cheques were addressed to the assessee companypany at Bhawagar We therefore hold that the cheques were received from Government at Bhavnagar and that the money was also received in Bhavnagar.
Whether in the circumstances of this case, the income, profits and gains in respect of the sales amounting,to Rs.
The Appellant preferred appeals to the Appellate Assistant Commissioner, Ahmedabad Range, against this order of the Income tax Officer for the said two assessment years.
On the materials as they stood on the record then, the Tribunal drew up on November 5, 1952, a statement of case in which all the facts and events above referred to were set out.
13,08,980 Rs.
16,72,693 as held by the Income tax Officer or any other figure , held that the cheques representing the said amount were received at Bhavnagar and the monies or sale proceeds were also received in Bhavnagar.
whether any portion of these cheques were received by post and if so whether there was any request by the appellant express or implied that the amounts of those cheques should be remitted to Bhavnagar by post, had certainly number been canvassed before any of the income tax authorities or before the Tribunal and did number find its place in the order of the Tribunal and any question of law appertaining thereto companyld number be said to arise out of the said order of the Tribunal.
Besides the same the Tribunal also referred in para.
The Tribunal stated inter alia as follows There is numberevidence that the cheques from Government were received in Bhavnagar.
The said order of the Tribunal was based on the facts admitted and or found by the Tribunal as stated in the Reference Applications made by the Revenue as aforesaid and this aspect of the case, viz.,
66,14,852 out of which sale proceeds amounting to Rs.
16,72,693 according to the appellant, was a mistake for Rs.
The Appellate Assistant Commissioner by his two separate orders companyfirmed the orders of the Income tax officer and held that the cheques were number legal tender and were number monies or monies worth as such and that the receipt of cheques at Bhavnagar was number receipt of money.
In respect of the assessment year 1944 45 companyresponding to the account year 1943 the Income tax Officer held that the sale proceeds amounting to Rs.
In the account year 1942 its total sales amounted to Rs.
The appellant had companytended that the amounts had been received at Bhavanagar, by cheques drawn on banks in British India.
A further appeal was taken by the appellant.
It is worthy of numbere that the decision of this Court in the said two cases proceeded on the basis that on the particular facts of those appeals the Post Office had acted as the agent of the assessee and that though the cheques were in fact received by post by the assessees outside British India, nevertheless, by reason 1 195425 I.T.R. 547.
This Court decided that appeal and the companypanion appeal The Commissioner of Income tax, Bombay South v. Messrs. Ogale Glass Works Ltd. 2 on April 17, 1954.
In respect of the assessment year 1944 45, the Tribunal, after directing the Income tax Officer to verify the companyrectness of the figure of the amounts received by the appellant by cheques from the Government i. e., whether it was Rs.
He held that the income amounting to Rs.
12,97,631 received from the Government of India in the accounting years relevant to the assessment for 1943 44 and 1944 45 respectively the amounts were received by cheques drawn on the Imperial Bank of India.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
In the said applications the facts which were admitted and or found by the Tribunal and which were necessary for drawing up a statement of the case were stated as under Regarding items of Rs.
14,72,267 was received in British India under s. 4 1 a of the Act.
2,58,987 and Rs.
50 of 1957.
In view of the fact however that an appeal had been filed 1 1952 21 I.T.R. 82.
19 of 1955 made by the Income tax Appellate Tribunal hereinafter referred to as the Tribunal to the Pligh Court under s. 66 1 of the Indian Income tax Act XI of 1922 hereinafter referred to as the Act whereby the High Court directed the Tribunal to submit a supplementary statement of case on the points mentioned therein.
27,11,136 on a proportionate basis, i.e., proportionate to the sales in and outside British India.
The question of law which was referred by the Tribunal to the High Court for its decision was Whether the receipt of the cheques at Bhavnagar amounted to receipts of sale proceeds in Bhavnagar.
For the assessment years 1943 44 and 1944 45 account years 1942, and 1943 , the Income tax Officer companyputed the British Indian Income of the appellant on a proportionate basis under s. 4 1 a of the Act.
The figure of Rs.
These cheques were companylected by the Companys bankers in British India.
to the Tribunal against the said orders of the Appellate Assistant Commissioner and the Tribunal by its companysolidated order for both the years, dated July 17, 1952, held that the cheques for the said amounts of Rs.
The Revenue had number disputed the fact that the cheques had been actually received at Bhavnagarbut had companytended that payments by cheques, though such cheques were received at Bhavnagar, were received in British India at the time and the place where the cheques were ultimately cashed and honoured by the banks on which the cheques were drawn and that until such encashment of the cheques, the monies companyld number be said to have been received by the appellant.
13,08,987 in respect of the assessment year 1943 44, were received at Bhavnagar and that the sale proceeds were also received in Bhavnagar.
This appeal with special leave arises out of a judgment and order of the High Court of Judicature at Bombay dated September 23, 1955, delivered in Income Tax Reference No.
J. Kolah and I. N. Shroff for the appellant.
N. Sanyal, Additional Solicitor General of India, N. Rajagopala Sastri and D. Gupta, for the respondent.
8 thereof to two letters on the record which showed that the cheques from the Supply Department were received by post.
5,53,447 in respect of the said latter year, being the aggregate amount of the cheques received at Bhavnagar from other merchants was also received in Bhavnagar.
2 1955 1 S.C.R. 185.
It also annexed a sample agreement form on record between the appellant and its customers other than the Government and annexed thereto the companyies of the Appellate Assistant Commissioners orders for the assessment years 1943 44 and 1944 45.
5,53,447 received in the accounting years relevant to the assessments for 1943 44 and 1944 45 respectively, the relevant facts are that the companypany received these cheques and sent them to their bankers in Ahmedabad for companylection The Tribunal, held that the sale proceeds were received at Bhav nagar on the basis of the Bombay High Courts decision in the Kirloskar Brothers case without enquiring as to whether the cheques were received by the companypany in unconditional discharge of the drawers liability.
12,97,631 as companytended for by the appellant or Rs.
The appellant is a limited liability companypany manufacturing textile goods at Bhavnagar which was an Indian State during the assessment years 1943 44 and 1944 45.
12,97,631.
The Judgment of the Court was delivered by BHAGWATIJ.
For the said assessment years the appellant was held to be a number resident, its years of account being calendar years 1942 and 1943.
May 12.
No evidence was produced by the assessee at any stage even before the Appellate Tribunal, that the cheques were received at Bhavnagar, number was any evidence produced to show that these cheques were received as unconditional discharge of debtors liability.
13,08,980 and Rs.
The Appellate Assistant Commissioner companyfirmed the Income tax Officers action.
