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TMI Blog1971 (9) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... in the taxable territories ? " The High Court answered the said question in favour of the assessee as follows : " On the facts and circumstances of the case, the profits and gains in respect of the sales, made to the Government of India, must be deemed to have been received by the assessee outside the taxable territories. " When Mr. R. H. Dhebar, learned counsel for the revenue, opened the appeals, a preliminary objection was raised by Mr. N.D. Karkhanis, learned counsel for the assessee-respondent, that the certificates granted by the High Court are not proper and as such the appeals are not maintainable. The nature of the preliminary objection will be referred to by us in due course. As we are accepting the preliminary objection, we will only refer to the facts in so far as they are relevant for holding that the certificates granted are not proper and as such the appeals are not maintainable. The assessee-respondent is a firm consisting of three partners, namely, Sohanmal, Mehtabchand and Allahdin. Sohanmal and Mehtabchand are also the two coparceners of a Hindu undivided family. The said family had got its own business firm known also by the name of the assessee, M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record to show as to how the cheques in question were sent, i.e., whether by post or by hand. The Appellate Tribunal further found that the assessee had given a direction to pay by cheques and that apart from this there was no other material on record to show any direction given by the assessee regarding the mode of despatch of cheques. The High Court, in its order under attack, noted the findings recorded by the Tribunal, namely, that the cheques were received by the assessee at Jaipur, but collected at Bombay, and that it is not established how the cheques were sent to the assessee by the Government of India. The revenue contended before the High Court that the amounts covered by the cheques in question must be considered to have been received by the assessee in the taxable territory, either at Bombay, on the basis that the amounts covered by the cheques were realised at that place, or at Delhi, on the ground that the cheques must be considered to have been received by the assessee at that place where the cheques were posted, as the post office is to be considered the agent of the assessee. The High Court first considered the question as to what is the effect of payments made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of 1967 related to the assessment year 1943-44. In the grounds of appeal, in particular, it was stated that the High Court has not properly interpreted the decisions of this court and that the High Court further erred in holding that there was no proof as to how the cheques were received by the assessee in Jaipur. Another ground was taken that the evidence on record establishes that the cheques were issued and sent to the assessee at his request by post. The learned judges who dealt with the applications for grant of certificates were different from those who dealt with the main reference. By order dated July 13, 1968, the High Court granted the certificates that the cases are fit for appeal to this court. Before the learned judges, the revenue contended that the assessee must be considered to have received the amounts covered by the cheques in the taxable territories on two alternative grounds : (1) that the payments by cheques made by the Government of India from Delhi to the assessee at Jaipur were not made at Jaipur where the cheques were received by the assessee but at Bombay where the cheques were cashed, or (2) the cheques were posted by the Government of India at Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t when answering the reference and characterised the said misunderstanding as unfortunate. The learned judges then referred to illustration (d) to section 50 of the Indian Contract Act and expressed the view that posting of the cheques in Delhi by the Government amounts to payment of money to the assessee in Delhi and that is the position regarding the present assessee. Ultimately, the learned judges held that the question of law which really arises in the present case is whether a presumption could be drawn under the circumstances of the case that the cheques were sent by the Government to the assessee by post or whether the fact of sending the cheques by post must be positively proved by the revenue. After referring to section 114 of the Indian Evidence Act and in particular to illustration (f) thereof, the learned judges observed that in the case on hand the cheques should have been sent by the Government from Delhi to the assessee either by post or by the messenger and that as it is not the case of either party that the cheques were sent by the messenger, the only conclusion to be drawn is that the cheques must have been sent by post. Any other conclusion, according to the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia, at Delhi, the High Court in coming to the conclusion that there is a substantial question of law has grossly erred in ignoring the specific findings recorded by the Appellate Tribunal that the revenue placed no evidence before it to show that the cheques were posted at Delhi, which finding has been accepted by the High Court when answering the reference. In view of this finding of fact, according to the learned counsel, there is no question of any presumption arising under section 114, illustration (f), of the Evidence Act, coming into play. The counsel further urged that the learned judges have granted a certificate on a matter which did not arise for consideration and which was not in dispute before the High Court when it answered the reference and which point had not even been raised in the applications for grant of certificate. When there was a categorical finding that the Government placed no evidence regarding the posting of cheques at Delhi, the reasoning of the learned judges when dealing with the applications for grant of certificates that the cheques must have been posted at Delhi, is opposed to evidence. Further, it was a conclusion which cannot be reached at the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch jurisdiction. It must be emphasised, that in the circumstances like this, the jurisdiction of the court, at the stage of dealing with applications for grant of certificate is limited only to considering whether any substantial question of law arises having due regard to the material on record and the discussion on facts and law contained in the judgment of the High Court which dealt with the appeal or reference or any other proceeding, as the case may be. Regarding the question that the assessee may be considered to have received the payments at Bombay, the learned judges have quite rightly declined to grant a certificate on the ground that the point is covered by the decisions of this court and that no substantial question of law arises. As we have already pointed out, the certificate has been granted by the learned judges on the basis that the general question whether a presumption under section 114, illustration (f), of the Evidence Act, can be raised is of great importance and that it is likely to arise in many future cases not restricted to income-tax. It should be remembered that this court should not be invited to decide any question of law much less the substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the finding recorded in the original judgment disposing of the reference. In our opinion, the entire discussion on this aspect of posting of the cheques at Delhi by the learned judges is beside the point, as that question no longer was available to the revenue, in view of the finding recorded against it, to which we have made a reference earlier. When once the question of a presumption under section 114, illustration (f), of the Evidence Act, does not fall to be considered in these proceedings, in view of the specific finding recorded by the Appellate Tribunal against the revenue, and accepted by the High Court, in our opinion, the High Court was not justified in certifying, on this ground, that the cases are fit for appeal to this court. As the issue of certificates by the High Court is not proper, the only course open to us is to cancel the certificates and set aside the order of the High Court granting them. The result is that the above appeals have become unsustainable, as they have been brought to this court on the basis of certificates, which, as held by us, have not been properly granted. The appeals, accordingly, are held to be not maintainable and are dismissed wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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