Commissioner of Income Tax vs Kirloskar Bros. Ltd.

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Not extracted

Decision Date: 19 April, 1954

Coram: Das

In the matter titled Commissioner of Income-Tax, Bombay South, versus Kirloskar Brothers Limited, the Supreme Court recorded that the case was listed on 19 April 1954 and that the judgment was delivered by Justice Das. The issue that was referred by the Income-Tax Appellate Tribunal to the Bombay High Court for its opinion concerned whether, on the facts of the present case, the income, profits and gains arising from sales made to the Government of India were received in British India within the meaning of Section 4(1) of the Income-Tax Act. The High Court, after considering the material before it, answered this question in the negative and set out the reasons for its conclusion in a judgment that also addressed the matters of a related appeal, identified as Appeal No. 19 of 1953. The Court observed that the factual background of the present appeal was substantially the same as the facts found in Civil Appeal No. 19 of 1953, Commissioner of Income-Tax, Bombay v. Messrs Ogale Glass Works Limited, except for three particular distinctions: first, that every cheque drawn in the transaction was expressly made non-negotiable; second, that the bank did not extend any credit to the assessee prior to the collection of those cheques; and third, that there was no finding on record that the assessee accorded credit to the Government for the amount represented by the cheque at the moment of receipt. Counsel appearing for both sides were invited to comment on whether these differences might alter the answer to the referred question, but neither side suggested that they would have any bearing on the conclusion previously reached in the other appeal. Accordingly, the Court held that the present case must be decided in accordance with the reasoning and result set out in the earlier judgment, and it consequently allowed the appeal, answering the referred question in the affirmative. The Court further ordered that each party bear and pay its own costs in both the Supreme Court and the High Court, and it formally recorded that the appeal was allowed.