BHOPAL TEXTILES LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference under s. 66(1), Indian IT Act, 1922 (hereinafter called the Act), arises out of the order of the Tribunal, Bombay, in I.T.A. No. 5997 of 1951 -52, on the following question of law, namely :

(2.) THE assessee, Bhopal Textiles Ltd., Bhopal, was a non -resident company in the year of account ending 31st March, 1945. Its total sales amounted to Rs. 71,47,260 and net profits to Rs. 26,85,000. Out of the total sales, goods of the value of Rs. 4,10,785 were supplied to the nominees of the Government of India at Agra, Allahabad and Delhi. This was done in pursuance of an agreement between the assessee company and the Government of India for the supply of goods to the Government or its nominees. It was agreed that the goods would be inspected, approved and taken delivery of at the mill premises and the price would be paid at Bhopal.

(3.) IN accordance with this agreement the goods were despatched to the nominees of the Government of India by railway, freight -to -pay, and the railway receipts were made out in the name of the consignees. The assessee company handed over the railway receipts to the Imperial Bank of India, Bhopal branch, for the purpose of collecting the money due, at ex -mill prices on the goods despatched. The branches of the Imperial Bank of India at Agra, Allahabad and Delhi delivered the railway receipts to the consignees on payment of the necessary charges and the money collected from them was sent to the Bhopal branch for being credited to the assessee company's account.