TMI Blog1954 (10) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore allow the appeal, quash the order made by the High Court and direct that the Tribunal do submit to the High Court a further statement of the case in regard to questions 1 and 2 which were referred by them to the High Court. Appeal allowed. - - - - - Dated:- 20-10-1954 - Judge(s) : GHULAM HASAN., MEHR CHAND MAHAJAN., N. H. BHAGWATI., S. R. DAS., VENKATARAMA AIYAR JUDGMENT The Judgment of the Court was delivered by BHAGWATI, J.--- The appellant, a non-resident company, was assessed to income-tax for the assessment year 1942-43 in respect, inter alia, of the profits earned on the sales of textile goods of the value of Rs. 4,21,871 supplied to the Government of India and of the value of Rs. 6,02,911 supplied to merchan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on what according to it appeared from the assessment order, viz., that Rs. 5,80,069 were actually received in British India, gave a further direction that the Tribunal should consider whether that sum was received in British India and if they found that that was so, the question of accrual or arising of profits would have to be determined only with regard to the balance, viz., Rs. 6,02,911 less Rs. 5,80,069. The High Court refused leave to appeal to this Court and the appellant therefore applied for special leave which was granted by an order of this Court dated the 23rd December, 1952. The facts relevant to the determination of the questions Nos. 1 and 2 shortly stated were as follows :--- (a) In about November, 1940, an invitatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r rates in which event the purchasers accepted the higher rates and the reporters intimated to the appellant that they had sold the goods at those higher rates. This communication was confirmed by the appellant informing the reporters that they had confirmed the sale. A formal document confirming the offer was then drawn up and was executed by the purchasers asking the appellant to supply the goods therein mentioned. This offer was subject to a written acceptance by the appellant in part or in full within 15 days of the date of the said document failing which it was to be considered as cancelled. The High Court considered that the only ground on which the revenue could tax the sale proceeds in British India was that the contracts for sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of goods to the Government of India was entered into in British India it was necessary to establish that the acceptance of the tender was made by the Government in British India or if Exhibit C constitutes a counter-offer that counter-offer was accepted by the appellant not at Indore but in British India. If such counter-offer had been accepted by the appellant in Indore either by a letter of acceptance written by the appellant or by conduct in supplying the goods in accordance with the terms of the counter-offer the contract for sale took place in Indore and not in British India. In regard to the sales of goods to the various merchants in British India also it was necessary to establish that the offers made by these merchants to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusion that the contracts for sale had been entered into in British India it should have called upon the Tribunal to submit to it a further statement of the case. The question whether the contracts for sale were entered into in British India or at Indore was not a question of fact to be determined by the Tribunal. It was a question of law to be determined by the High Court on a true construction of the correspondence, documents and the conduct of the parties. The learned Attorney-General frankly conceded that he could not support that part of the order passed by the High Court and agreed that a further statement of the case should have been called for by the High Court in regard to the questions 1 and 2. The direction which the H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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