COMMISSIONER OF INCOME TAX Vs. KESHAV MILLS COMPANY LIMITED

JUDGEMENT

(1.) IN this reference a question arose with regard to 3 amounts and when the reference came on before us we disposed of the questions arising out of two amounts and directed the Tribunal to submit a supplementary statement of the case with regard to the amount of Rs. 6,71,735 and that supplementary statement has now been submitted to us.

(2.) THE question that arose with regard to this amount was whether this amount had been received by the assessee in British India. The supplementary statement that we called for was necessary before the Supreme Court delivered its judgment which is reported in Commissioner of Income -tax v. Ogale Glass Works Ltd. After this judgment the position with regard to receipt has been considerable simplified. Now, in this case the amount concerned was paid by the various merchants to the assessee by drafts, hundies and cheques, and the Supreme Court has laid down that where there is on the part of the seller a request express or implied, to pay the amount by a cheque or hundi or draft by post then the seller constitutes the post office his agent, and when the cheque, hundi or drafts is posted in law there is a receipt by the seller. If therefore these drafts, hundies and cheques were posted in British India at the request of the assessee, which is the seller in this case, then the amount represented by the drafts, hundies and cheques would be received in British India.

(3.) IT will, therefore, be necessary to send the matter back to the Tribunal with a direction that they will determine on the evidence led by both parties whether the sum in question was paid by various merchants by sending drafts, hundies or cheques by post. If the Tribunal finds that in some cases the amount was no sent by post and what amount was sent otherwise than by post. Costs reserved. SUPPLEMENTARY STATEMENT OF CASE II