1. In this reference a question arose with regard to 3 amounts and when the reference came on before us we disposed of the questions arising out of two amounts and directed the Tribunal to submit a supplementary statement of the case with regard to the amount of Rs. 6,71,735 and that supplementary statement has now been submitted to us.
2. The question that arose with regard to this amount was whether this amount had been received by the assessee in British India. The supplementary statement that we called for was necessary before the Supreme Court delivered its judgment which is reported in Commissioner of Income-tax v. Ogale Glass Works Ltd. After this judgment the position with regard to receipt has been considerable simplified. Now, in this case the amount concerned was paid by the various merchants to the assessee by drafts, hundies and cheques, and the Supreme Court has laid down that where there is on the part of the seller a request express or implied, to pay the amount by a cheque or hundi or draft by post then the seller constitutes the post office his agent, and when the cheque, hundi or drafts is posted in law there is a receipt by the seller. If therefore these drafts, hundies and cheques were posted in British India at the request of the assessee, which is the seller in this case, then the amount represented by the drafts, hundies and cheques would be received in British India.
3. Now, in the letter writing by the assessee, which is annexure, which is annexure 'B' to the supplementary statement of the case, there is a clear and unequivocal that 'the arrangement with the merchants has been uniformly followed during the along course of conduct of business, that payments would be accepted (apart from cash) by cheques, hundies, drafts and these had to be sent by buyer to us at the mills'. Therefore the case here stands on a higher footing than a request by a seller to the purchaser to send the amount by a cheque, hundi or draft. The assessee is relying on an agreement or an arrangement to that effect. Now, it is true that in this case the seller does not ask the buyer to send the amount by a cheque or hundi or draft by post; but the Supreme Court points our that whether the request is to send a particular document by post or not may be implied from the surrounding circumstances, and one of the most important circumstances as again pointed out by the Supreme Court, is commercial practice. There could not be the slightest doubt in this case that when the mill company which is situated in Petlad requests merchants all over India to send the amounts by Cheques, hundis or drafts, it impliedly is requesting these merchants to send the payment by cheques, hundies or draft by post. Therefore, in our opinion, this case comes within the ratio of the Supreme Court decision and there is an implied request by the assessee company to the merchants to send amount by post. But Mr. Kolah rightly urges that where is no finding of fact by the Tribunal that this amount was in fact sent either by drafts or hundies or cheques by post Mr. Kolah says that it may will be that a merchant might send the amount by a draft, hundi or cheque by a messenger and a draft, hundi or cheque might be delivered to the mill company at Petlad itself. Therefore, before we can determine upon the liability of the assessee company we do require an additional fact whether the sum in question was sent by drafts, hundies or cheques by post.
4. It will, therefore, be necessary to send the matter back to the Tribunal with a direction that they will determine on the evidence led by both parties whether the sum in question was paid by various merchants by sending drafts, hundies or cheques by post. If the Tribunal finds that in some cases the amount was no sent by post and what amount was sent otherwise than by post. Costs reserved.
SUPPLEMENTARY STATEMENT OF CASE II
5. As requisitioned by their Lordships of the Bombay High Court we draw up a supplemental statement of the case and refer it to the High Court of Judicature at Bombay under section 66 (4) of the Income-tax Act.
2. The direction given to the Tribunal is :
'That the Tribunal will determine on the evidence led by both parties whether the sum in question was paid by various merchants by sending drafts, hundies or cheques by post. If the Tribunal finds that in some cases the amount was no sent by post, then they will determine what amount was sent by post and what amount was sent otherwise than by post.' 3. On the receipt of the order of the Hon'ble Court, the case was remanded to the Income-tax Officer with a view to gather facts. The Income-tax Officer has submitted a remand report. In paragraph 3 of the report the Income-tax Officer writes :
'The Principal Officer of the assessee company has stated in this letter that the records are not available at this distance of time and that the assessee agrees to presuming that the whole of the said sum of Rs. 6,71,735 came by post, by cheques, drafts, hundies or cash.' A company of the letter dated October 4, 1956, from the principal officer of the assessee company and a copy of the report of the Income-tax Officer are annexures 'F' and 'G' and form part of the case.
4. On these facts, our finding is that the sum of Rs. 6,71,735 was received by the assessee by cheques, drafts or hundies by post.
5. The departmental representative accepts the statement of the case and has no suggestion to offer. Mr. Kolah, on the other hand, relies upon a recent decision of the Supreme Court reported as Commissioner of Income-tax v. Patney & Co. and wants to made out entirely a new case for the assessee for the first time at this state. We cannot allow him to do so. Our duty is confined to carry out the direction given by their Lordships in their order dated February 15, 1955.