9911796707
TMI Blog1966 (4) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015 ending on 9th November, 1958. The respondent assessee is a partnership firm having business in paper bags, gunny bags and other commodities. During the relevant previous year it had entered into transactions in gunny bags entailing purchase and sale of delivery orders. This was done according to the prevailing practice in the Calcutta jute trade where formal transactions in gunny, hessian, etc., are carried on by the transfer of the relative delivery orders only on full payment of the purchase or sale prices. There is no actual delivery of the commodities and this happens because of the fact that the manufacturers of the jute goods do not normally come into contact with the shippers, namely, the exporters. It is only through chain of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that under the Sale of Goods Act the transfer of title to goods in transit can be legally effected by the transfer of relevant documents of title and that in the present case the title to the goods was legally transferred by transferring the delivery order which enabled the holder to take delivery or possession of the goods. The Appellate Tribunal upheld the decision of the Appellate Assistant Commissioner that the transactions in the present case were governed by the principles laid down by the Supreme Court in Dunichand's case . Counsel on behalf of the revenue contended that in Explanation 2 to section 24(1) of the Indian Income-tax Act the words " any commodity " were not confined to jute goods and contended that the decision in Dunic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of ownership, first, there was to be a legal transfer of title and, secondly, the goods must be ascertained and these could not be effected by delivery order. It should be noticed that these contentions introduce new meanings to delivery or transfer of goods. Counsel for the assessee, on the other hand, contended that the basis of a speculative transaction within the meaning of Explanation 2 to section 24(1) of the Indian Income-tax Act was that it was to be a transaction in which a contract for purchase and sale of goods was periodically or ultimately settled otherwise than by actual delivery or transfer of the commodity. Counsel for the assessee emphasised the word " settled " and put in the forefront the essence of speculative transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of possession thereof or (ii) possesses or has control over a godown or other means and equipments necessary for the storage and supply of jute goods. The only controversy in the case before the Supreme Court was whether the respondent was a person who habitually dealt in the sale or purchase of jute goods involving actual delivery of possession thereof. It was contended before the Supreme Court that the delivery orders did not represent the goods and the transfer of delivery orders did not involve as between the intermediate parties actual delivery of possession of the goods. The Supreme Court held that the word " involving " occurring in the enactment meant resulting in and if the chain of contracts as entered into the market resulted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case there is no material to bold that there was in fact any settlement. On the contrary, the finding is that the prevailing practice in the Calcutta jute trade is that the formal transactions are carried on by transfer of relative delivery orders on full payment of the purchase and sale prices and that the assessee sold and purchased the delivery order on payment of full price. Counsel for the revenue contended that a pucca delivery order was not a document of title and there could not be a transfer of title unless the goods were ascertained. Reliance was placed on the decision of the Supreme Court in Dunichand's case , in support of that contention. The language of the provisions of West Bengal Goods Future Ordinanace 1949, wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontract for the sale of unascertained goods, no property in the goods was transferred to the buyer until the goods were ascertained by appropriation. The Supreme Court found in that case on the evidence that the goods covered by the pucca delivery order were not ascertained at the time such orders were issued and also that ascertainment took place in the shape of appropriation when the goods were actually delivered in compliance therewith. It was observed in the case of Anglo-India Jute Mills Co. v. Omademull, that it would depend upon evidence whether the goods have been ascertained and Jenkins C.J. said that the question whether property had passed as between the original seller and the buyer was not required to be examined and that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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