9911796707
TMI Blog1960 (4) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... pute between the assessee and the Revenue is in respect of a sum of ₹ 6,04,588 relating to sales effected to merchants in British India. Statements were filed by the assessee when the original statement of the case was made and in those statements details of the categories of sales were given. But, it is not necessary to refer to those details and the figures which we have already mentioned will suffice. A note appended to both those statements was as under: "N.B. No merchant ever paid any amount in cash to our employee or broker or any of our representative in British India. The whole amount is remitted by post to Petlad by the buyers." As to the disputed amounts, which according to the Revenue, represented moneys received by the assessee company in British India, the Income-tax Officer decided against the assessee. The matter was ultimately carried in appeal and the Appellate Tribunal had to determine whether the sale proceeds amounting to ₹ 9,53,304 and ₹ 6,04,588, which included proportionate profits, were received by the assessee company or on its behalf in British India. The Tribunal held that the moneys due on cheques and hundies were collected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stituted the post office its agent for the sending of these cheques .... The Tribunal will consider all these matters in the light of the recent judgments, so that we will be in a position to decide whether these two amounts were received in Baroda or in the taxable territories. It is only after we have received a supplementary statement of the case from the Tribunal that we will be in a position to decide the question raised on this reference. As neither party applied its mind to this aspect of the matter, it will only be fair that they should be allowed to adduce any further evidence as they may desire ..." The Tribunal was by that order also asked to arrive at and record its finding. On remand, affidavits were filed and a mass of oral evidence was recorded by the Income-tax Officer. Learned counsel for the assessee has drawn our attention to a part of that evidence, but it will not be necessary to examine that evidence in any detail in view of the finding recorded by the Tribunal for after all we are principally concerned with the finding recorded by the Tribunal and would accept the same unless there is any legal ground for not doing so. The Tribunal had directed the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies or drafts. Therefore, this much is certainly common ground that the buyers of the goods manufactured by the assessee company who were in British India and had to pay for the same sent by post cheques, hundies and drafts to the assessee company at Petlad. The short question, therefore, that had to be considered by the Tribunal and has to be considered by us is whether there was any implied request by the assessee company to the merchants to make payments by sending those cheques, etc., by post to Petlad so as to constitute the post office the agent of the assessee company in the matter of those cheques. In the statement of the case, the Tribunal has summarised the evidence which was brought on record after the remand. We shall be adverting only to that part of the evidence, which is material for the proper appreciation of the arguments urged before us by learned counsel on either side. The assessee company produced affidavits from several of its constituents in regard to the practice that obtained in their dealings with the assessee company. Those deponents were cross-examined by the department and re-examined by the assessee. The assessee company also relied on a letter dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of payment at Petlad, that, however, has not been the case of the assessee company before the Tribunal; nor has it been the case of the assessee company before us. The agreement indicated in that letter, it is said, has to be gathered from the practice of the parties. It may also be mentioned that there is no evidence, oral or written, of any express agreement in that behalf brought on the record of this case. Therefore, of the assessee company to the Income-tax Officer. The relevant portion of that letter is as under: " 1.Our sales were on terms of payment at Petlad. When goods were ready we used to send our invoice (a copy of which has already been filed) and a covering letter. Forms of the invoice and covering letter are attached (with English translation). These show that there was no demand to send payment by post or otherwise but the same contained request to credit the amount to us. 2.The buyers were bound to pay at Petlad. They were free to pay by cheque or draft or hundi or cash in the manner they liked. There was no stipulation or demand to send the payment by post. We debited the buyers when we sent the invoices and as has been stated so often we credited th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d those affidavits and examine the material on record to the extent that it is necessary for us to do so, we shall examine an argument in limine which has been pressed before us by Mr. Palkhivala. It is contended that the only question of law, which this court could consider, was that which could be said to arise out of the order of the Tribunal when it decided the matter in appeal in the first instance. It is said that at that time no facts relating to any payment by cheques and no arrangement sub sequently spoken of were before the Tribunal and this court had no jurisdiction to give the directions which it gave when it made the order of remand. We are asked to ignore that order made by this court on 23rd September, 1955, and deal with the reference and answer the question referred to us on material which was on record when the reference first came up for hearing before this court. An identical argument was urged before us by Mr. Palkhivala in Commissioner of Income-tax v. Keshav Mills Co. Ltd. [1962] 44 ITR 647 . The only difference is that the same argument has been urged before us this time with greater elaboration. To accede to the argument of Mr. Palkhivala would be tantamoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must necessarily infer an implied request by the assessee to remit by post, the parties having adopted the normal accepted commercial practice for making the payment in such type of cases." The Tribunal has held that there was an implied request by the assessee company to the merchants to send the cheques, etc., by post. It has pointed out that the deponents who were cross-examined by the Income-tax Officer when they gave their evidence deposed substantially to what they had stated in their affidavits. It would appear from the evidence taken into consideration by the Tribunal that there was material before it on which it could arrive at its finding of fact on the present point. In addition to the evidence of which we have already made mention, Mr. Palkhivala has relied on certain paragraphs in the affidavit made by the deponents. As we have already mentioned, the affidavits are in the same form and these paragraphs find place in all the affidavits. Both Mr. Palkhivala and Mr. Joshi have relied before us on the contents of two paragraphs from these affidavits but from their own point of view. They are as under : . . . . "2. The terms and conditions on which our purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablish an implied request by the assessee company of the nature under consideration. But the words "we had all these years made payments to the said limited company by sending them to Petlad cheques, hundies or drafts" in the context of an established practice are followed by the words "and that is the accepted mode of payment between us". It is not possible for us to minimise the effect and importance of these words while considering the present contention of Mr. Palkhivala. The deponent is speaking of a mode of payment which was acceptable to and accepted by both the parties and that mode of payment was that the buyers should make payment by sending cheques, hundies or drafts from places in British India to the assessee company at Petlad. Of course, the cheques, hundies or drafts had to be sent to the assessee company at the place where it was carrying on business. Therefore, sending them to Petlad does not really touch the matter one way or other. What is of the crux of the matter is that the mode of payment acceptable to and accepted by the assessee company was that payment should be made by sending the cheques, hundies or drafts by post from British India. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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