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Amarsinhji Mills Ltd. Vs. Commissioner of Income-tax, Gujarat - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtGujarat High Court
Decided On
Case NumberIncome-tax Reference No. 8 of 1965
Judge
Reported in[1967]64ITR45(Guj)
ActsIncome Tax Act, 1922 - Sections 4(1) and 4(1)(9)
AppellantAmarsinhji Mills Ltd.
RespondentCommissioner of Income-tax, Gujarat
Appellant Advocate I.M. Nanavati, Adv.
Respondent Advocate J.M. Thakoer, Adv. General and; K.L. Talsania, Adv.
Cases ReferredPetaled Turkey Red Dye Works Co. Ltd. v. Commissioner of Income
Excerpt:
direct taxation - receipt of payment - sections 4 (1) and 4 (1) (9) of income tax act, 1922 - issue relates to whether sale proceeds received by assessee for sales affected to british indian buyers were deemed to be received in british india or outside - assessee contended presence of express agreement between buyer and assessee that sale proceeds be received by assessee and post office acted only as agent of buyer for transmitting cheque so sale be considered outside british india - assessee liable to dispatch goods only after cheque was honoured so post office clearly an agent of buyer - held, sale proceeds deemed to have been received outside british india. - - the tribunal negatived this argument by pointing out that there was a specific direction in the letter that if the.....bhagwati, j.1. two questions are referred to us for our determination in this reference. the first relates to four assessment years, namely, 1945-46, 1946-47, 1947-48 and 1948-49, while the second relates to the first three of these assessment years. the facts in regard to the two questions are quite distinct and it would, therefore, be convenient to set them out separately in regard to each question. the first question raises the point as to whether certain sale proceeds received by the assessee in respect of sales effected to british indian buyers were received in british india or outside british india. if they were received in british india, the profit embedded in them would be taxable under section 4(1)(a) as profit received in british india, but it would not be so taxable if they.....
Judgment:

Bhagwati, J.

1. Two questions are referred to us for our determination in this reference. The first relates to four assessment years, namely, 1945-46, 1946-47, 1947-48 and 1948-49, while the second relates to the first three of these assessment years. The facts in regard to the two questions are quite distinct and it would, therefore, be convenient to set them out separately in regard to each question. The first question raises the point as to whether certain sale proceeds received by the assessee in respect of sales effected to British Indian buyers were received in British India or outside British India. If they were received in British India, the profit embedded in them would be taxable under section 4(1)(a) as profit received in British India, but it would not be so taxable if they were received outside British India. This position obtained because the assessee was a non-resident during the relevant assessment years and its liability to British Indian tax depended on its receipt of income within British India under section 4(1)(a). The assessee, which is a limited liability company, owned a textile mill and carried on the business of manufacture and sale of cotton textile goods in Wankaner, which was at the material time an Indian State outside what was then known as British India. Prior to May, 1944, the assessee used to sell its cloth freely to various merchants within British India as also outside British India in the open market but from May, 1944, the distribution and sale of cloth was brought under control by the government. Thereafter, the textile mills could sell the cloth manufactured by them only to quota-holders and the quota of each quota-holder was fixed with reference to a particular textile mill on the basis of the average purchases of cloth made by him from that textile mill during the preceding three years. There were, therefore, quota-holders also in regard to the assessee's textile mill who were entitled to purchase cloth from the assessee according to the quotas respectively allotted to them. This system of controlled distribution and sale of cloth which came into force from May, 1944, continued throughout the remaining part of the calendar year 1944 and also throughout the calendar year 1945, 1946 and 1947 and sales of cloth were accordingly made by the assessee to the quota-holders in accordance with their respective quotas. Amongst the quota-holders were several British Indian merchants and the question arose in the course of the assessment of the assessee for the assessment years 1945-46, 1946-47, 1947-48 and 1948-49, for which the corresponding accounting years were the calendar years 1944, 1945, 1946 and 1947, whether the sale proceeds from those British Indian buyers were received by the assessee in British India. The sale proceeds were admittedly received by the assessee by cheques sent by the British Indian buyers by post to the assessee at Wankaner. The revenue claimed that the cheques were posted by the British Indian buyers pursuant to the request of the assessee and the post-office was, therefore, constituted the agent of the assessee for the purpose of receiving payment and, consequently, when the cheques were posted, there was receipt by the assessee of the sale proceeds and such receipt took place in British India where the cheques were posted. The assessee on the other hand argued that there was an express agreement between the assessee and the British Indian buyers that the sale proceeds, whether by cheque or by cash, should be paid to the assessee in Wankaner and, consequently, the post-office was the agent of the British Indian buyers in the matter of transmission of cheques to the assessee and the receipt of the sale proceeds was accordingly in Wankaner outside British India. The determination of the validity of these rival contentions obviously depended on the proper interpretation of the terms of the contract under which the sales were affected by the assessee to the British Indian buyers. Now the mode in which the sales were effected by the assessee to the quota-holders was as follows : The assessee every month addressed a letter to each quota-holder in regard to the goods each quota-holder was in the same terms and we shall, therefore, take as a typical letter, the letter dated 14th May, 1944, addressed by the assessee to one Mayabhai Manilal. The letter is in Gujarati and an English translation of it has been annexed by the Tribunal as annexure 'K' to the statement of the case. But it was common ground between the parties that the translation as given in this annexure was not a correct translation. The assessee, therefore, produced before us a true copy of the letter in Gujarati and by consent of parties it was accepted by us as forming part of the statement of the case. Now the parties could not agree upon a correct translation of the letter and particularly the translation of clause (2) of the terms of normal procedure set out in the letter on which depended primarily the decision of the entire controversy in the present reference which formed the subject-matter of considerable debated between the parties. Since there was conflict between the parties in regard to the correct translation and the translation depended on the true interpretation to be put on the words used in the original Gujarati letter, so that the translation involved the process of interpretation, we had to undertake the task of translating the material portions of the letter including clause (2) of the terms of normal procedure set out in the letter. The letter commenced by pointing out to Mayabhai Manilal that, in accordance with the purchases made by him during the preceding three years, he had been allotted goods of the value of Rs. 13,915-8-0 in respect of his quota out of the production for the month of May and referring to a bill for that amount sent along with the letter, the letter asked him :

'... to record the contract for the goods mentioned in the bill and to send immediately a cheque for Rs. 13,916-8-0 (Rupees Thirteen thousand nine hundred and sixteen and annas eight only) making the cheque in the name of our mill cross order or pay cash consideration in the mill.'

2. The letter then proceeded to state that on the cheque for the price of the goods being honoured, the assessee would dispatch the goods of the quota in accordance with the instructions of the buyer, having regard to the availability of booking facilities, and send the railway receipt to the buyer on the goods being dispatched. There was an insistence in the letter that the buyer should :

'arrange that the cheque for the above amount being the price of the goods of the quota for the month of May is received by us from you by 25th May, 1944.'

3. The letter then set out the terms of the normal procedure followed by the assessee in its dealing with merchants and asked the buyer to make a note of those terms. The terms were in six clauses, of which only clauses (2) and (6) are material. Clause (2) in Gujarati was in the following terms :

Malni Rakamno cheque agar Rokad Aveg Tamare Millne Wankaner Bharvano Chhe. Darek Mahinano quoterno Ketla Rupiano Mal Tamne Apvano Chhe Te Tamone Mill Janavi deshe Ane To Rakamo cheque Tamare Millne Bhari Turat Mokli Apvo Padshe.

The English translation of clauses (2) and (6) was as follows :

'(2) The cheque for the price of the goods or consideration in cash is to be paid by you to the mills at Wankaner. The mills will inform you as to the value of the goods to be given to you against the quota of every month and you will have to send a cheque for that amount to the mills immediately.

(6) It is legally required that you should have licence to trade in cloth. So let us know your licence number and particulars in the letter along with cheque. If the particulars of the licence are not received in writing from you, your right to take goods according to your quota will be cancelled, which please note.'

4. This was the type of the letter addressed by the assessee to each quota-holder and the terms and conditions set out in the letter were accepted by each quota-holder and constituted the terms of the contract between the parties and it was in pursuance of these terms and conditions that the British Indian buyers posted cheques for the price of the goods to the assessee at Wankaner and the sales of the goods were effected by the assessee to the British Indian buyers. The Income-tax Officer took the view that on a proper construction of the terms and conditions set out in the letter, the post office was the agent of the assessee and the sale proceeds were, therefore, received by the assessee in British India where the cheques were posted. On appeal by the assessee, the Appellate Assistant Commissioner disagreed with the view of the Income-tax Officer and held that clause (2) of the normal procedure set out in the letter constituted a specific agreement between the assessee and the British Indian buyers that the price of the goods should be paid to the assessee in Wankaner and the post office was, therefore, the agent of the British Indian buyers and not of the assessee and the sale proceeds were received by the assessee in Wankaner where the cheques were received. The revenue, being dissatisfied with this decision, preferred an appeal to the Tribunal. Before the Tribunal, it appears, the argument advanced on behalf of the assessee was that on a proper construction of the terms and conditions contained in the letter, the contract between the assessee and the British Indian buyers was that the cheques should be delivered at the mill premises and not that they should be sent by post. The Tribunal negatived this argument by pointing out that there was a specific direction in the letter that if the British Indian buyers made payment of the price by cheques, they should send the cheques, and in the context, the implication of this request must clearly be held to be that the cheques may be sent by post. The Tribunal observed that under the new system of controlled distribution and sale introduced for the first time, it could not have been intended by the parties that the British Indian buyers must hand in the cheques at the mill premises and, having regard to all the relevant considerations, it was clear that the contracts contemplated sending of cheques by the British Indian buyers by post. In this view of the matter, the Tribunal held that the decision of the case was governed by the ratio of the decisions of the Supreme Court in Commissioner of Income-tax v. Ogale Glass Works Ltd. and Shri Jagdish Mills Ltd. v. Commissioner of Income-tax and the cheques having been posted by the British Indian buyers pursuant to the request of the assessee, the sale proceeds must be held to have been received in the taxable territories where the cheques were posted by the British Indian buyers. The Tribunal did not - presumably because the argument was not put in that form - consider whether, even if the contracts contained a request by the assessee to the British Indian buyers to send the cheques by post, there was a specific agreement between the parties which provided that the sale proceeds, whether by cheque or by cash, shall be paid to the assessee in Wankaner and the post office was, therefore, the agent of the British Indian buyers and not of the assessee, despite the provision that the cheques may be sent by the British Indian buyers by post. The assessee, having lost before the Tribunal, applied for a reference and, on the application the Tribunal referred, inter alia, the following question for the opinion of this court :

'Whether, on the facts and in the circumstances of the case, the profits embedded in the sale proceeds remitted by the merchants in the then British India by way of cheques were received by the assessee in the taxable territories under section 4(1)(a) of the Indian Income-tax Act, 1922 ?'

5. Now the principles applicable to cases of the type before us are well-established and difficulty arises not so much in understanding and appreciating those principles as in the application of those principles to the facts of the case before the court. The first question which arises in cases of this kind is as to when payment can be said to have been received by the assessee when it is made by the buyer by cheque : is it received when the cheque is delivered to the assessee or is it received when the cheque is cashed There was at one time considerable controversy in regard to the true determination of this question, but it now stands concluded by the decision of the Supreme Court in Ogale Glass Works case. The facts in that case were that the assessee had supplied certain goods to the government of India and payment for the goods had been made by the Government of India by means of cheques posted from British India to the assessee at Aundh, which was an Indian State, where the assessee had its registered office and carried on business. The cheques were endorsed by the assessee in favour of the Aundh Bank, Ogalewadi Branch, which, in its turn, endorsed them in favour of a Bombay bank and it was the Bombay bank which cleared the cheques through the clearing house in Bombay. The argument urged on behalf of the revenue was that the cheques were no doubt received by the assessee in Aundh but they were received conditionally, that is, subject to realization and no payment could, therefore, be said to have been received by the mere receipt of the cheques; payment was received only when the cheques were cashed and since that happened in Bombay, the receipt of payment by the assessee was in British India. The supreme Court negatived this argument and found on the facts that the cheques were received by the assessee from the Government of India in complete discharge of the claim for the price of the goods and the payment was, therefore, received by the assessee on the receipt of the cheques, but the Supreme Court also added that even if the cheques were taken by the assessee conditionally, the position was no different, for the cheques not having been dishonoured but having been caused, the payment related back to the dates of the receipt of the cheques and in law the dates of payment were the dates of the delivery of the cheques. The Supreme Court, in taking this view, observed that when it is said that a payment by a negotiable instrument is a conditional payment, what is meant is that such payment is subject to a condition subsequent, namely, that the negotiable instrument shall be met at the proper date; if the negotiable instrument is honoured on presentation, the payment takes effect from the date of the delivery of the negotiable instrument; if, on the other hand, the negotiable instrument is dishonoured on presentation, the creditor may consider it as a waste paper and resort to his original demand. The Supreme Court thus held that, in either view of the matter, whether the cheques were received by the assessee unconditionally or conditionally, the result was the same, namely, that payment was received by the assessee on the receipt of the cheques. This decision of the Supreme Court was also cited before us in Petaled Turkey Red Dye Works Co. Ltd. v. Commissioner of Income-tax, and in that case we summarised the ratio of the decision of the Supreme Court in the following words :

'.... where a cheque is received by a creditor from a debtor, there may be an express or implied agreement between them that the cheque shall be accepted by the creditor in unconditional discharge of the liability of the debtor, in which event the cheque would operate as payment as soon as it is received by the creditor; but even where the cheque is received as conditional payment of the debt, if the cheque is not dishonoured but is cashed, the payment relates back to the date of the receipt of the cheque and in law the date of payment is the date of the delivery of the cheque so that in this latter case also, the cheque would operate as payment on the date when it is received by the creditor.'

6. It will, therefore, be seen that it is entirely immaterial to the question of receipt of payment whether the cheque by which payment is made is received by the assessee unconditionally or conditionally. This answers completely the argument urged on behalf of the assessee that since, under the contract, the assessee was liable to dispatch the goods only after the cheque was honoured on presentation, the receipt of the cheque by the assessee in Wankaner was a term of the contract or was, at any rate, contemplated under the contract and the post office was, therefore, the agent of the British Indian buyers and not of the assessee in the matter of transmission of the cheque. The stipulation in the contract that the assessee would not be liable to dispatch the goods until the cheque was cashed meant nothing more than this that the cheque would be received by the assessee conditionally, that is, subject to a condition that it shall be honoured on presentation and the cheque being accepted as conditional payment, the obligation of the assessee to perform his part of the contract would not arise unless the condition was fulfilled by the encashment of the cheque. But, as pointed out in Ogale Glass Works case, that has no bearing on the question as to when payment can be said to have been received by the assessee, for, even in such a case, as soon as the cheque is encashed, the payment relates back and the date of delivery of the cheque is the date when payment is received. The question to which we must, therefore, address ourselves is as to when, on a proper reading of the terms and conditions of the contract, the cheques sent by the British Indian buyers by post could be said to have been received by the assessee and that would answer the query where they were received, in Wankaner or in British India

7. Now it was common ground between the parties that the cheques were posted by British Indian buyers in British India to the assessee at Wankaner. The question, therefore, resolves itself into a narrow one, namely, whether the post office acted as an agent of the assessee or of British Indian buyers. If the post office acted as the agent of the assessee, it is clear that as soon as the cheques were posted by British Indian buyers in British India, the title to the cheques passed to the assessee and the assessee received the cheques in British India. If, on the other hand, the post office was the agent of the British Indian buyers, there was no receipt of the cheques by the assessee until the cheques reached their destination in Wankaner. The law on the point as to when the post office can be said to be the agent of the debtor or the creditor is now well-settled by the decisions of the Supreme Court in Ogale Glass Works case, Commissioner of Income-tax v. Patney & Co., and Shri Jagdish Mills case and was stated by us in Petlad Turkey Red Dye Works Company's case, in the following terms :

'In order to determine the place where payment can be said to have been received by a creditor from a debtor when such payment is made by cheque or hundi sent by post, the court must first inquire whether there is any agreement between the parties. If there is agreement between the parties, it must determine the place of payment and in such a case there is no room for implication. Such was the case in Commissioner of Income-tax v. Patney & Co. If there is no agreement between the parties in regard to the place of payment, the court must see whether the cheque or hundi was posted by the debtor pursuant to a request made by the creditor. If it is shown that the creditor authorized the debtor to send the cheque or hundi by post, the post office would be the agent of the creditor for the purpose of receiving payment and the property in the cheque or hundi would pass to the creditor as soon as it is posted, with the result that payment would be received by the creditor at the place where the cheque or hundi is posted by the debtor. Now, a request which would constitute the post office the agent of the creditor may be express or it may even be implied from the facts and circumstances of the case. In Ogale Glass Works case, the request was an express request whereas in the case of Shri Jagdish Mills, the request was implied from the facts and circumstances of that case. The question must, therefore, always be, firstly, whether there is any agreement between the parties in regard to the place of payment and, secondly, if there is no such agreement, whether the cheque or hundi was sent by the debtor through post pursuant to any request express or implied made by the creditor.'

8. Both sides relied on this statement of the law and each side contended that, if the principles laid down there were properly applied, the decision of the controversy must go in its favour. Mr. Nanavati, on behalf of the assessee, urged that there was a specific agreement between the assessee and the British Indian buyers in regard to the place of payment and that agreement was that the sale proceeds must be paid by the British Indian buyers to the assessee in Wankaner whether the payment be by cheque or by cash and this agreement, he submitted, was to be found in the first part of clause (2) of the terms of normal procedure set out in the letter. He agreed that the opening part of the letter as also the latter part of clause (2) contained a direction by the assessee to the British Indian buyers to send the cheques to the assessee if the British Indian buyers decided to make payment by cheques, but he urged that there was nothing in the letter to show that the assessee required the cheques to be sent by post and, even if it could be spelt out by necessary implication that the cheques were intended to be sent by post, that was irrelevant, since the specific agreement between the parties that the sale proceeds must be paid to the assessees in Wankaner displaced the inference which might otherwise arise from the request of the assessee to the British Indian buyers to send the cheques by post and made it clear that the post office would not be the agent of the assessee but would be the agent of the British Indian buyers. The learned Advocate-general on behalf of the revenue disputed the validity of this contention urged on behalf of the assessee and contended that, on a proper construction of clause (2) of the terms of normal procedure set out in the letter, there was no agreement between the parties that the sale proceeds, when paid by cheque, should be paid to the assessee in Wankaner. All that the first part of clause (2), according to him, meant was that if payment was made by cheque, the cheque should be sent to the assessee at Wankaner, and if payment was made in cash, the cash should be paid to the assessee in Wankaner. He submitted that, having regard to the specific direction contained in the opening part of the letter and the second part of clause (2) that if the British Indian buyers wanted to make payment by cheques they should send the cheques to the assessee, the only proper way in which the first part of clause (2) could be read was that the cheques which were required to be sent by the British Indian buyers by virtue of this specific direction should be sent by them to the assessee in Wankaner. The argument thus sought to equate the first part of clause (2) with the provision which came up for consideration before the Bombay High Court in Commissioner of Income-tax v. Keshav Mills Co. Ltd., and it was contended that just as it was held in the Keshav Mills case that the provision did not amount to an agreement between the parties that the payment should be made in Petlad, so also it must be held here that the first part of clause (2) did not constitute an agreement between the parties that, even if the price was paid by cheque, the payment should be made in Wankaner. The revenue in putting forward this contention clearly attempted to take the case out of the ratio of Patney's case so that it could fall fairly and squarely within the ratio of Ogale Glass Works case and Shri Jagdish Mills case. These were the rival contentions urged before us and, as will be seen, they depended principally on the true meaning and effect of the first part of clause (2) of the terms of normal procedure.

9. Now there can be no doubt that if, on a true interpretation, the first part of clause (2) did not amount to stipulation that the price of the goods when paid by cheque should be paid to the assessee in Wankaner but merely provided that in such a case the cheque should be sent to the assessee at Wankaner, there would be considerable force in the submission of the learned Advocate-General, for, then, it might be possible to say, as was said by the Bombay High Court in Keshav Mills case, that there was no agreement between the parties for the payment of the price by cheque to be made in Wankaner and the only provision being that the cheque should be sent to the assessee at Wankaner by post, the post office was constituted the agent of the assessee. But we are afraid that is not the correct interpretation of the first part of clause (2). The first part of clause (2) makes a provision in regard to both the modes of payment. It first refers to the cheques for the price of the goods and then it refers to consideration in cash and, in regard to both, it says that they shall be paid by the British Indian buyers to the assessee in Wankaner. The verb which is used in the Gujarati language is 'bharvano chhe' and it governs both the objects, namely, the cheque for the price of the goods and the cash consideration. Now, admittedly, this verb in reference to cash consideration means 'is to be paid' and therefore according to the plain dictates of grammar and language it should have the same meaning also with regard to the cheque for the price of the goods. The verb 'bharvano chhe' according to its ordinary natural connotation, means 'is to be paid' and, though it may be more appropriate in regard to payment of cash consideration, it cannot be said to be inappropriate so far as payment of the cheque for the price of the goods is concerned. It is not at all uncommon to use the verb 'bharvano chhe' in reference to a cheque when it is intended to be conveyed that the cheque is to be paid to a particular person. The contention of the learned Advocate-General seeks to give two different meanings to the verb 'bharvano chhe', one meaning, namely, 'is to be paid' in reference to cash consideration, and another, namely, 'is to be sent' in reference to the cheque for the price of the goods. The verb 'bharvano chhe' in its plain ordinary sense cannot mean 'is to be sent.' The appropriate verb in the Gujarati language to connote 'is to be sent' would be 'mokalavano chhe' and, as a matter of fact, we find that the draftsman of the letter has used that verb at other places in the letter when he wanted to convey the meaning indicated by the expression 'is to be sent'. If the draftsman of the letter wanted to convey the same meaning in this part of clause (2), the draftsman would have used the same verb, namely, 'mokalavano chhe' and not instead used the totally inappropriate verb 'bharvano chhe'. To construe the verb 'bharvano chhe' as meaning 'is to be sent' would, in our opinion, be doing violence to the language used in the letter. The learned Advocate-General contended that the verb 'bharvano chhe' was used in a rather loose sense and that it was clear from the letter read as a whole that this verb was used to denote the idea of 'sending' in the case of the cheque for the price of the goods and the idea of 'payment' in the case of cash consideration. We cannot accept this contention. It would not be right to attribute looseness in drafting to the draftsman of the letter on the basis of a presumed intention, when it is possible to read the words used by the draftsman according to their plain natural meaning and give full effect to them. If, by reading the words used in the first part of clause (2) according to their plain ordinary meaning, any inconsistency was resulting between the first part of clause (2) and the other parts of the letter, an appeal could legitimately have been made to us to give to the words used in the first part of clause (2) a meaning different from their ordinary natural meaning, but we do not think that reading the words in such manner brings about any inconsistency with the other provisions of the letter. It is an undoubted rule of construction of documents that no single part of a document must be read in isolation and that all the parts must be read together so as to make a consistent document out of the whole and that full effect must be given to every part of the document without in any way rendering any part superfluous or redundant. But this rule of construction is, in our opinion, not violated by the construction which we are inclined to place on the first part of clause (2). The letter, in its opening part, undoubtedly contains a specific direction that if the British Indian buyers wish to pay the price of the goods by cheque, they must send the cheque to the assessee and this is emphasized by the second part of clause (2). There is, therefore, clearly a request or authorization by the assessee to the British Indian buyers to pay the price of the goods by sending the cheque for the price to the assessee and, according to the course of business usage in general, to which was part of the surrounding circumstances attention must be paid by the court, as also the language of clause 6, the parties, it must be held, must have intended that the cheque would be sent by post which is the usual and normal agency for transmission of such instruments. Now if there were no specific agreement between the parties as set out in the first part of clause (2), the conclusion would have been irresistible that by this request of the assessee to the British Indian buyers, the post office was constituted the agent of the assessee and the case would have fallen directly within the ratio of the decisions of the Supreme Court in Ogale Glass Works case and Shri Jagdish Mills case. But the assessee made it clear while requesting the British Indian buyers to send the price of the goods by cheque, which cheque would ordinarily be sent by post, that though the cheque may be sent by post, the payment of the price, so far as the assessee is concerned, shall be made in Wankaner. The specific agreement between the parties clearly excluded the inference which would otherwise have arisen from the request of the assessee to the British Indian buyers to send the price of the goods by cheque that the post office was constituted the agent of the assessee. The effect of the specific agreement was as if the assessee told the British Indian buyers : 'You must send the cheque to me, you may send it by post which is the usual mode of transmission of such instruments but the post office will not be my agent for the purpose of receiving payment and, so far as I am concerned, I must receive the cheque in Wankaner.' It would, therefore, be seen that, even if the words used in the first part of clause (2) are read according to their plain natural meaning, the first part of clause (2) can be read harmoniously with the other provisions contained in the letter without creating any inconsistency or detracting in any way from the full force and effect of the specific direction in regard to sending of cheques to the assessee. There is accordingly no reason why we should attribute looseness to the draftsman of the letter or construe the words used in the first part of clause (2) in a manner different from that which according to their ordinary natural connotation they bear. We accordingly reach the conclusion that, reading the letter as a whole, it is clear that the first part of clause (2) contains a specific agreement between the assessee and the British Indian buyers that the price of the goods, whether by cheque or by cash, shall be paid to the assessee in Wankaner and there being such specific agreement, the case falls within the ratio of the decision in Patney's case and the sale proceeds must be held to have been received by the assessee in Wankaner where the cheques were delivered to the assessee. Our answer to Question No. 1 is, therefore, in the negative.

( Editor: The vernacular matter printed hereunder has been omitted).


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