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TMI Blog1967 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the judgment of the High Court of Judicature at Bombay answering the following question (Question No. 3) against the Commissioner of Income-tax, Bombay City and Suburban District, appellant before us : " 3. Whether, on the facts and in the circumstances of the applicant's case, the Tribunal was right in holding that a proportionate part of the profits determined on sales grouped under items 3, 4, 5 and 9 in the assessment order by the application of rule 33 was assessable to income-tax ? " The High Court, in view of its answer to this question, did not answer the following question (Question No. 2) : " Whether, on the facts and in the circumstances of the applicant's case, the Tribunal was right in holding that in respect of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. (a) Sales in pursuance of business canvassed by company's representatives in British India 10,02,642 3,35,855 6,66,787 20,759 6,46,028 (3) (b) Sales to British Indian merchants through brokersand agents in British India 2,91,891 . . . 2,91,891 . . . 2,91,891 (4) (c) Sales to British Indian merchants and brokers during their visit at Indore 3,85,214 . . . 3,85,214 . . . 2,86,224 (5) (d) Sales to British Indian merchants at the time of their own or their broker's visit at at Indore 3,13,306 . . . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed f.o.r. Indore. The relevant railway receipt made in the name of 'self ' was endorsed in favour of the customer and was handed over to the Imperial Bank of India, Indore, for being delivered to the merchant. Sale proceeds were received at Indore through the Imperial Bank of India, Indore. (b) Sales of Rs. 2,91,891.--The brokers in British India who were described as freelance brokers transmitted the offers to the company. These offers were made on the brokers' own forms and were communicated to the merchants through the brokers. Such orders were placed by the brokers in the normal course of business of these brokers who were not engaged by the mill as such. The goods were delivered f.o.r. Indore. The relevant railway receipt made in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India for being delivered to the merchants. The sale proceeds were recovered from the Imperial Bank of India, Indore, at Indore as in other cases. " The Income-tax Officer held that profits apportionable on sales of Rs. 16,57,198 accrued or arose in British India and as such taxed the same on accrual basis. Rs. 3,35,855 having been received in British India were taxed on accrual-cum-receipt basis. The Appellate Assistant Commissioner on appeal held that, taking into account all the facts of the case, it would be fair to take 33 1/3 per cent. of the profits realised on sales amounting to Rs. 16,57,198 as attributable to activities in British India. Out of this amount he deducted sales totalling Rs. 1,77,139 as the contracts in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Imperial Bank of India, Indore. He further says that the fact that the goods were to be delivered f.o.r. at Indore does not make the property in the goods pass at Indore. There is considerable force in the learned counsel's submissions. In Seth Pushalal Mansinghka (P.) Ltd. v. Commissioner of Income-tax, this court, on similar facts, held that the property in the goods passed in Part A and Part C States where the delivery was made. This court further held that the income accrued only when the purchaser paid the price through the bank. The method of delivery in that case was as follows : " ....... the appellant consigned the goods to ' self ' and the railway receipts along with the bills of exchange were presented by the appellant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not on the aspect of the passing of property in the goods. These questions are perhaps relevant to the answering of question No. 2 but we are unable to regard this aspect as a new question. Following our judgment in Seth Pushalal Mansinghka (P.) Ltd. v. Commissioner of Income-tax, we hold that the income accrued within British India and that a proportionate part of the income was assessable to income-tax. In view of this the answer to the question (Question No. 3) must be in the affirmative. Regarding question No. 2, the learned counsel for the appellant invited us to answer the question. The learned counsel for the assessee raised a number of points on which the High Court has not expressed its views. Under the circumstances we thin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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