Law: Income Tax Act, 1922

Section: 3,466

[Indian Income Tax Act, 1922 (Xl of 1922)].......Sections 3, 4 66-Reference to High Court-Question to fact-Non-resident manufacturer-Sale of textiles to merchants in British India-Apportionment of profits from sales towards profits accruing In British India -Question as to what proportion of the p of its of the sales arose or accrued in British India-Whether essentially one of fact-Held yes The appellant Company manufactured textiles in his mills at Indore outside British India and sold its goods to merchants in British India during 1941, 1942 and 1944 to 1946. The sales were of four categories; (i) sales pursuant to business canvassed by appellants representatives in British India ; (ii) sales through brokers and agents in British India ; (c) and (d) sales to British Indian merchants or their brokers during their visit at indore. The Appellate Tribunal held that in respect of categories (a) and (b) it was just and equitable to apportion 15 per cent of the profits to have accrued or arisen in British India and that in respect of categories (c) and (d) 7½ per cent could be said to have accrued or arisen in British India. Held, that the question as to what proportion of the profits of the sales in the several categories arose or accrued in British India was essentially one of fact depending upon the circumstances of the case in the absence of some statutory or other formula, any finding on the question of proportion involved some element of guess work. The endeavour could only be to be approximate and there could not in the very nature of things be great precision and exactness in the matter. As long as the proportion fixed by the Tribunal is based -upon relevant material, it should not be disturbed. Held also. on the facts, that it was just and equitable to apportion 15 of in percent of the profits of sales in categories (a) and (b) and 7½ per cent the profits of sales in categories (c) and (d) as accruing or arising British India. Case reversed :- Hukumchand Mills Ltd. v. Commissioner of Income Tax [1968] ITR 450. Appeals from the and order dated January 31 and February 1, 1968, of the Bombay High Court in Income Tax Reference No. 5 of 19 1. The of the High…

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