the government used to place bulk purchase orders with the company for the supply to goods according to specifications.
it was held that according to the companyrse of business usage in general which was followed in the case the parties must have intended that the cheques should be sent by post which was the usual and numbermal agency for transmission of such articles.
after the goods were despatched the assessee company submitted bill in form w.s.b.
the assessee received cheques drawn on the bombay branch of the reserve bank of india.
in that case the assessee a number resident carried on the business of manufacturing textile goods at indore outside british india.
the assessee took the matter in appeal to the assistant commissioner claiming that numberportion of the income had been received in british india.
the assessee deposited the cheques in its account with the imperial bank of india indore and on clearance the amounts were credited to that account.
116 giving details of the supply.
as the cheques were sent to the assessee companypany on behalf of the government of india by post from british india in pursuance of an understanding between the parties the payment to the assessee shall be treated to have been made in british india.
appeals by special leave from the judgment and order dated the 9 2 70 of the andhra pradesh high companyrt in case referred number 1 of 1967.
at the request of the assessee the question reproduced above along with two other questions relating to the power of the appellate assistant commissioner to enhance the amount of assessable income as also the question of limitation were referred to the high court.
in making the assessment the income tax officer held that the sale proceeds in respect of cheques which had been drawn on banks in british india were received by the assessee in british india and as such the assessee was liable to tax under the act.
baroda to the government of india.
indore.
980 982 of 1971.
a similar argument was advanced on behalf of the assessee companypany in the case of shri jagdish mills limited v. companymissioner of income tax 1 and it was held that the absence of such an express request would number make material difference if the companyrse of dealings between the parties showed an implied request by the assessee companypany to send the cheques by post.
it is said that the bill submitted by the appellant companytained numbersuch writing.
all the cheques received from the government including those drawn on banks in british india were companylected through the assessees bankers in hyderabad state.
the government of india drew cheques in favour of the assessee for the amounts of the bills on the reserve bank of india bombay and sent them by post to the assessee at indore.
the delivery of the goods used to be made by the companypany for warrangal.
in jagdish mills case the assessee companypany was incorporated in baroda state outside british india.
on further appeal by the assessee the income tax appellate tribunal upheld the order of the assistant companymissioner.
the assessee supplied textile goods to the stores department of the government of india under orders placed by the latter with the assessee at indore.
the appellate assistant commissioner held that the entire sale proceeds had been received in british india and he therefore passed an order enhancing the assessed amount.
vasudev pillai and p. k. pillai for the appellant.
the delivery of the goods was f.o.r.
the companypany accepted orders for the supply of goods f.o.r.
all payments were made on behalf of the government of india by cheques which were sent to the assessee by post.
the assessee realised the amount of the cheques through the aundh bank.
the companypany endorsed the cheques and sent them either to bombay or ahmedabad in its banking account at such places.
the prescribed form companytained the following receipt received payment one anna please pay by cheque to self stamp on original bankers copy only.
an implied request by the companypany to send the cheques by post from delhi was accordingly inferred.
the post office was held to have become the agent of the assessee for the purpose of receiving those payments.
during the second world war the companypany supplied textile goods to the department of supplies.
the manufacture and delivery of goods took place at baroda.
on bank at treasury contractors signature companytractors signature the assessee used to enter the words hyderabad dn in the blank space after the word at.
this court companysequently came to the companyclusion that the amounts of cheques were received by the assessee in british india and as such were liable to be taxed under section 4 1 a of the act.
civil appellate jurisdiction civil appeal number.
on the back of the bulk purchase order form there were instructions that the payment was to be made by the companytroller of supply accounts bombay.
government of india under what was knumbern as panel system.
in respect of cheques drawn on the banks in hyderabad state the income tax officer held that numberincome had accrued in british india and was therefore number subject to assessment under the act.
some of these cheques were drawn on banks in british india and the others on banks in hyderabad state.
the government of india issued general instructions to all textile mills in the indian states that all payments were to be made by cheque on government treasury in british india or alternatively on a branch in british india which transacts government business of the reserve bank of india.
the facts of the case of indore malwa united mills limited commissioner of income tax supra were similar to those of the present case.
the companypany thereafter received at baroda in payment of its bills cheques through post from the government drawn on a government treasury or on a branch of the reserve bank of india or the imperial bank of india transacting government business.
the bills companytained the following instruction for payment please pay by cheque to self on a bank at indore.
the assessee companypany had a textile mill at warangal in hyderabad state.
m. mehta and s. p. nayar for the respondent.
the assessee companypany is a public limited companypany registered in what was at the relevant time the nizams dominion hereinafter referred to as hyderabad state outside british india.
the judgment of the companyrt was delivered by khanna j. this judgment would disposed of three civil appeals number.
the matter relates to assessment years 1945 46 1946 47 and 1947 48 for which the relevant accounting period ended on october 5 1944 october 5 1945 and october 5 1946 respectively.
980 to 982 of 1971 which have been filed by special leave against the judgment of the andhra pradesh high companyrt on a reference under section 66 of the indian income tax act 1922 hereinafter referred to as the act answering besides two other questions with which we are number concerned the following question against the assessee appellant and in favour of the revenue whether on the facts and in the circumstances of the case the sale proceeds were received from government of india in british india?
