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TMI Blog1960 (8) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... les. A deed of partnership was also executed on March 16, 1944. The assessee entered into contracts with the Government for the supply of goods, and in the assessment year 1942-43, Rs. 10,80,658 and in the assessment year 1943-44, Rs. 17,45,336 were assessed as its income by the Income-tax Officer, Contractor's Circle, New Delhi. The supplies to Government were made f. o. r. Jaipur by the assessee, and payment was by cheques which were received at Jaipur and were endorsed in favour of the joint Hindu family, which acted as the assessee's bankers. The contention of the assessee was that this income was received at Jaipur outside the then taxable territories. This contention was not accepted by the Income-tax Appellate Tribunal, Delhi. The assessee then applied for a reference to the High Court under section 66(1) of the Indian Income-tax Act, and by its order dated December 10, 1952, the Income-tax Appellate Tribunal referred the following question for the decision of the High Court : " Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in the taxable territories ? " The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax, it was held by the Punjab High Court that where cheques were given to a bank for purposes of collection, the receipt of the money was at the place where the bank on which the cheques were drawn was situated. These views found further amplification, and were applied in two other cases by the Bombay High Court. They are Kirloskar Bros. Ltd. v. Commissioner of Income-tax and Ogale Glass Works Ltd. v. Commissioner of Income-tax. In both these cases, it was held that unless the payee expressly constituted the post office as his agent, the mere posting of the cheque did not constitute the post office the agent of the payee, and that the amount of the cheque was also received at the place where the cheque was received. In Kirloskar Bros. Ltd. v. Commissioner of Income-tax it was held that the mere posting of the cheque in Delhi was not tantamount to the receipt of the cheque in Delhi, because the payee had not requested the Government to send the cheque by post. In Ogale Glass Works' case, the Bombay High Court asked for a supplementary statement of the case from the Tribunal as to whether there was any express request by the assessee that the cheque should be sent by post, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts which were received, from the merchants or the Government, were received by cheques drawn on banks in British India which were ultimately encashed in British India, the monies could not be said to have been received in Bhavnagar though the cheques were in fact received at Bhavnagar. " The reference was held back by the Tribunal till the decision of this court in Ogale Glass Works' case and Kirloskar Brothers' case. Even after seeing that in those two cases the request for payment by cheques to be sent by post made all the difference, the Tribunal did not frame its statement of the case or the question to include this aspect, because that aspect of the matter was never considered before. The question referred was thus limited to the legal effect of the receipt of the cheques at Bhavnagar without advertence to the fact whether the cheques were so sent by post at the request, express or implied, of the mills. The question framed was : " Whether the receipt of the cheques in Bhavnagar amounted to receipt of the sale proceeds in Bhavnagar ? " The question as framed and the statement which accompanied it brought into controversy the only point till then considered by the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they were that the advisory jurisdiction was confined (a) to the facts on the record and/or found by the Tribunal and (b) the question which would arise from the Tribunal's order. It was pointed out by this court that if was not open to the High Court to order a fresh enquiry into new facts with a view to amplifying the record and further that it was equally not open to the High Court to decide a question of law, which did not arise out of the Tribunal's order. This was illustrated by comparing the question as framed by the Tribunal with the question which the High Court desired to decide. Whereas the Tribunal had only referred the question : " whether the receipt of the cheques at Bhavnagar amounted to receipt of sale proceeds in Bhavnagar ? ", what the High Court intended deciding was : " Whether the posting of the cheques in British India at the request express or implied of the appellant, amounted to receipt of sale proceeds in British India ? " These were two totally different questions, and it was held that the High Court could not decide a matter which was different from that decided by the Tribunal, nor call for a statement of the case bearing on this new matter. The pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a supplemental statement on the lines indicated by the High Court in the order under appeal. At the very start, one notices a difference in the question of law in this case and Ogale Glass Works' case, on the one hand, and the question of law in Jehangir Vakil Mills' case, on the other. In the former two cases, the question is very wide, while in the latter it is extremely narrow. This can be seen by placing the three questions side by side as below : Jehangir Vakil Mills' case : " Whether the receipt of the cheques in Bhavnagar amounted to receipt of the sale proceeds in Bhavnagar ? " Ogale Glass Works' case : " Whether on the facts of the case, income, profits and gains in respect of sales made to the Government of India was received in British India within the meaning of section 4(1)(a) of the Act ? " This case : " Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government of India were received by the assessee in the taxable territories ? " It is thus quite plain that the question as framed in this case can include an enquiry into whether there was any request, express or implied, that the amount of the bil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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