Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Indian Income-Tax Act (XI o/1922) ss. 4 (1) (a) and (c) 18 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Indian Income-tax Act, 1922 (11 of 1922) |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Indian Income-tax (XI of 1922), ss. 4(1) (a) and (c), 13-Non-resident-Accounts in mercantile system-Sale of goods in British India through agents-Assessability of profits derived from such sale-Provisions of law applicable to such cases-Income-tax authorities, whether bound to compute income according to mercantile system-Applicability of s. 13 to non-residents. A non-resident company manufactured textile goods at outside British India and sold the goods ex-mills. A firm, R & Co., guaranteed the sale-price of goods sold ex-mills by the company to purchasers at Ahmedabad within British India. As the company maintained its accounts according to the mercantile system, the company debited R & Co., with the price of goods sold and credited the sales account with the amount of the bills. R & Co., collected the amounts of the bills from the purchasers on behalf of the company and credited the sums realised in the company's account with banks at Ahmedabad and also disbursed them to creditors of the company in British India. These payments were credited by the company to R & Co. During the relevant accounting year the company thus received Rs. 12,68,480. The company also received Rs. 4,40,878 from sales to purchasers in British India. The amount of the sales bills for which hundis were drawn on the purchasers in favour of banks were debited by the company to the accounts of the respective merchants and credited to the sales account and the sums received by the banks from the purchasers against delivery of tho railway receipts were credited by the company to the accounts of the respective purchasers. In either case there was no change in the relationship of vendor and purchaser between the company and the purchasers by reason of the entries made in the company's books. The question as reframed by the High Court was whether these two sums were sale proceeds of the goods sold by the assesses to merchants in British India and whether they were received in British India and could be included in the assessable income of tho company in British India. |
Judge | Hon'ble Mr. Justice Natwarlal Harilal Bhagwati Hon'ble Mr. Justice Vivian Bose |
Neutral Citation | 1953 INSC 10 |
Petitioner | Keshav Mills Ltd. |
Respondent | Commissioner Of Income-tax, Bombay |
SCR | [1953] 1 S.C.R. 950 |
Judgement Date | 1953-01-30 |
Case Number | 151 |
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