1968 (9) TMI 1

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..... to the Burma Teak Trading Co. Ltd., Colombo ? (2) If the answer to the above question is in favour of the assessee, then whether, on the facts and circumstances of the case, the assessee is entitled to the concession under the Part B States (Taxation Concessions) Order, 1950 ? and (3) Whether, on the facts and circumstances of the case, the apportionment of profits of business is called for pursuant to the assessee's trading activities in Bangalore (Mysore State) ? " The assessee is a firm carrying on business in Bangalore in the Mysore State. It was appointed as the sole selling agent for Ceylon except Jaffna Peninsula and the town of Trincomalee for the purpose of marketing, selling or distributing Lotus Brand tiles and ridges manuf .....

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..... er ", should be allowed to it. The income-tax authorities as also the Appellate Tribunal decided against the assessee. It was held that hardly any activity took place at Bangalore in the matter of earning the profits from the transactions in question. The High Court was of the view that, since the profits were received in the Part B State, namely, Bangalore, it could not be said that the entire profit accrued or arose within the meaning of clause (a) of sub-section (1) of section 4 of the Act in the taxable territories other than Part B State. After referring to section 42(3) of the Act and certain decisions of this court, it was observed that the business operations which produced profits were carried out at three different places, i.e., .....

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..... s in Feroke in British India and that the goods were also delivered f.o.r. Beypore, which was in British India. The assessee's agent resided in British India and supervised all the operations there. Our attention has been invited to the findings of the Tribunal which, inter alia, were that the assessee purchased the goods at places outside Bangalore and the sales were also effected in Ceylon ; the assessee continued to retain its title to the goods till they were delivered to the Ceylonese buyers on their accepting the documents and bills of exchange forwarded through the bank in that country. The sale operations were carried out in Ceylon and the profits attributable to those transactions accrued and arose only in Ceylon which was outsid .....

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