- (1.) This appeal on a certificate by the High Court is brought against the judgement of the High Court of Madhya Bharat in a Reference by the Income Tax Appellate Tribunal under S. 66(I) of the Income Tax Act. The appellant is the Commissioner of Income Tax and the respondents are a firm of manufacturers of perfumery and hair oils at Ratlam in Madhya Bharat and their goods are sold throughout India. At the relevant time Madhya Bharat was a Part B State and the sole question for determination is where were the income, profits and gains received or were deemed to be received and on that would depend the rate at which the respondents would be liable to be assessed because of the concessional rates applicable to Part B States.
(2.) The facts lie in a short compass. The respondents, a registered firm, were assessed for the assessment year 1950-51 at the rate or rates applicable to income, profits and gains arising or accruing in Part A States. The course of their business was this: they sent out agents to various parts of India. They canvassed orders and sometimes took advance payments in full or in part and after deducting their expenses, remitted the balance to the respondents at Ratlam through Bank Drafts etc. The goods ordered were sent to the customers either by V.P.P. or by rail. In the latter case the Railway Receipts in favour of self were sent through a Bank deliverable against payment of the Demand Draft drawn upon the buyers and sent with the Railway Receipts. This price when received by the Bank was sent by the Bank by means of Bank Draft to the respondents at Ratlam who sent them for being cashed and credited to their account at Bombay.
(3.) The Income Tax Officer held that the major quantity of goods were supplied to the customers in what was Part A and C States either by V.P.P. or by rail, the Railway Receipts being in favour of the respondents and payment was received as stated above.;