# The New Jehangir Vakil Mills Ltd v. The Commissioner of

- **Citation:** [1961] 1 S.C.R. 210
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Bench:** S. K. DAs, M. HrnAYATULLAn, r. C. SHAII
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-new-jehangir-vakil-mills-ltd-v-the-commissioner-of-2161
- **Pages:** 12

## Headnote

Income-lax -
Reference -- l'cr.vcr of High Courl tu call for
supplemental stalemetit of case-·- Indian
Jnco~-tax Act, 1922
(I I of 1922), S. 66(4).
The appellant entered into contract with Government for
the supply of goods, and in the assessment year 1942-43
Rs. 10.~0.653 and in the assessment year 1943-44. Rs. 17.4),336
were assessed as its income by the lnco1ne-tax Officer. 1'hc supplies to Govcrnn1ent were made f. o. r. Jaipur by the appellant,
and payment \\'as by cheques \vhich \\'ere received at Jaipur.
The contention of the appellant v.·as that this income \\'as
received at Jaipur outside the then taxable territories.
l'his
contention was not accepted by the Income-tax Appellate Tribunal, Delhi.
The appellant then applied for a reference to the
High Court under s. 66(1) of the Indian Income-tax Act, and by
its order dated December 10, 1952, the Tribunal referred the
following question for the decision of the High Court.
"Whether on the facts and circumstances of the case the
profits and gains in res~ct of the sales made to the Government
'
I
1 S.C.R. SUPREME COURT REPORTS
211
'
of India were received by the assessee in the taxable territories?"
.
, The High Court remanded the case to the Tribunal for a
supplemental statement of case calling for a finding on the question " whether the cheques were sent to the assessee firm by
post or by hand and what directions, if any, had the assessee firm
g_1ven to the department-in the maiter ". The appellant questioned the order of the High Court relying on the decision in
New ]ehangir Vakil Mill's case>--£1960] l S,C.R. 249.
-
Held, that the enquiry in such cases must be to see whether
the question decided by the Tribunal admits of 'the consideration
of the new point as ·an integral or an incidental part thereof.
The supplemental statement· which the Tribunal is directed to·
submit must arise from the facts.admitted and/or found by the
Tribunal and should nof open the door to fresh evidence.
·
H e/d, further, that the question as framed in this case wa~
wide enough to inc;lude an enquiry into whether there was any
request, express or implied, th.at the amount of the hills be paid
by cheques so as to bring the matter within the dicta of this
Court in the Ogale Glass l:Vorks case, [1955] r S.C,R.· 185 .or
Jagdish Mills case, [1960] l S,C,R. 236.
.
ln the absence of anything expressly said in the Ordet of
the High Court to the contrary, it cannot be held that the direction given would lead inevitably to the admitting of fresh evidence as that has been prohibited by the New Jehangir Vakil
Mills case.
The New Jehangir Vakil Mills Ltd. v. The Commissioner of
Income-tax, [1960] r S,C.R. 249, distinguished.
]agdish Milis Ltd. v, Commission~r of Income-tax, [1960] r
S,C.R. 236, Keshav Mills Co, Ltd., v, Commissioner of. Income-tax,
[1950] 18 LTR. 407,,Sir Sobha Singh v. Commissioner of 1ncometax, [1950] lS I.T.R. 998, Kirlo>kar Bros, Ltd. v. Commissioner of
Income-tax, I 19s2J Zt l.T.R.' ~2. Commissioner of Income-tax v.
Ogal"- Glass Works Ltd, [1955) l S.CR. 185, Commissioner of
Income-tax v .. Kirldskar Bros. Ltd., [1954) 25 I.T.R. 547 and
Mrs. Kusumbrn D. Mahadevia, Bombay v. Commissioner of Income·
tqx, BoJllbay, [1960] 3 S,CR. 417, 'eferred to.
,
,
_CIVIL .APPELLATE ,JURISDICTION: Civil Appeal No.
30 of 1958.
·,
'· ,,, ..
A ppPal by spepjal leave from the judgment and
order dated l\1ar9h: 24, 1955, of the Punjab High
Court in Civil Refe/ence No. 3 .of 1953.
Gopal Singh, for the appellants.
-K. N. Rajagopala Sastri and D. Gupta, fol" the respondent.
r960
Z oraster & Co.
v,
Contt'llission!!r. of
I ncbnic~tax
Zora~t~r 6 Co.
212
SUPREME COURT REPORTS
[1!161]
1960. August 17.
The Judgment of the Court was
delive~ed by
- v.
HIDAYATULLAH .T.-This appeal, by special leave
c,.,.,,.rnoua "! of this Court, is against the judgment and order dated
lncwu-lax
March 24, 1955, of the Punjab High Court by which
Hidayat1<1/alo 1- the High Court, purporting to a.ct under s. 66(4) of
the Indian Income-ta

## Text

210
SL'.PIU~;\fE COURT REPORTS
[Hl61]
'960
standard to satisfy the test of" active member". The
burden which lies upon the petitio1wr who impoaches
A
M;ad1"1""Ghai dh the validity of the classification to show that it
111a11a a
cui
t
•
•
.
v.
violates tho guarantee of equal protcctwn has not been
n, Fua,;u of discharged. On the material placed before us we canIHd•a
not say that the p<'riod fixed by the Govornme111. as
the standard fur ascertaining tho active mcmberohip
Suil,a Rao J
b.
bl
ur
k
1
August 17.
· is ar 1trary or·unn•asOIHL e.
n e must ma e it c ear
that this finding must be confined only to tho validity
of the impugned uotification dated August 31, 1956.
The petition accordingly fails and is di"sruissed with
costs.
Petition dismissed.
:\1/S. ZORASTER AKD CO.
v.
THE CO:\IMISSlONER OF INCOME TAX,
DELHI, AJMEH, RAJASTHAN
A~D MADHYA
BHARAT (NOW) MADHYA PltADESH.
(S. K. DAs, M. HrnAYATULLAn AND .r. C. SHAII, JJ.)
Income-lax -
Reference -- l'cr.vcr of High Courl tu call for
supplemental stalemetit of case-·- Indian
Jnco~-tax Act, 1922
(I I of 1922), S. 66(4).
The appellant entered into contract with Government for
the supply of goods, and in the assessment year 1942-43
Rs. 10.~0.653 and in the assessment year 1943-44. Rs. 17.4),336
were assessed as its income by the lnco1ne-tax Officer. 1'hc supplies to Govcrnn1ent were made f. o. r. Jaipur by the appellant,
and payment \\'as by cheques \vhich \\'ere received at Jaipur.
The contention of the appellant v.·as that this income \\'as
received at Jaipur outside the then taxable territories.
l'his
contention was not accepted by the Income-tax Appellate Tribunal, Delhi.
The appellant then applied for a reference to the
High Court under s. 66(1) of the Indian Income-tax Act, and by
its order dated December 10, 1952, the Tribunal referred the
following question for the decision of the High Court.
"Whether on the facts and circumstances of the case the
profits and gains in res~ct of the sales made to the Government
'
I
1 S.C.R. SUPREME COURT REPORTS
211
'
of India were received by the assessee in the taxable territories?"
.
, The High Court remanded the case to the Tribunal for a
supplemental statement of case calling for a finding on the question " whether the cheques were sent to the assessee firm by
post or by hand and what directions, if any, had the assessee firm
g_1ven to the department-in the maiter ". The appellant questioned the order of the High Court relying on the decision in
New ]ehangir Vakil Mill's case>--£1960] l S,C.R. 249.
-
Held, that the enquiry in such cases must be to see whether
the question decided by the Tribunal admits of 'the consideration
of the new point as ·an integral or an incidental part thereof.
The supplemental statement· which the Tribunal is directed to·
submit must arise from the facts.admitted and/or found by the
Tribunal and should nof open the door to fresh evidence.
·
H e/d, further, that the question as framed in this case wa~
wide enough to inc;lude an enquiry into whether there was any
request, express or implied, th.at the amount of the hills be paid
by cheques so as to bring the matter within the dicta of this
Court in the Ogale Glass l:Vorks case, [1955] r S.C,R.· 185 .or
Jagdish Mills case, [1960] l S,C,R. 236.
.
ln the absence of anything expressly said in the Ordet of
the High Court to the contrary, it cannot be held that the direction given would lead inevitably to the admitting of fresh evidence as that has been prohibited by the New Jehangir Vakil
Mills case.
The New Jehangir Vakil Mills Ltd. v. The Commissioner of
Income-tax, [1960] r S,C.R. 249, distinguished.
]agdish Milis Ltd. v, Commission~r of Income-tax, [1960] r
S,C.R. 236, Keshav Mills Co, Ltd., v, Commissioner of. Income-tax,
[1950] 18 LTR. 407,,Sir Sobha Singh v. Commissioner of 1ncometax, [1950] lS I.T.R. 998, Kirlo>kar Bros, Ltd. v. Commissioner of
Income-tax, I 19s2J Zt l.T.R.' ~2. Commissioner of Income-tax v.
Ogal"- Glass Works Ltd, [1955) l S.CR. 185, Commissioner of
Income-tax v .. Kirldskar Bros. Ltd., [1954) 25 I.T.R. 547 and
Mrs. Kusumbrn D. Mahadevia, Bombay v. Commissioner of Income·
tqx, BoJllbay, [1960] 3 S,CR. 417, 'eferred to.
,
,
_CIVIL .APPELLATE ,JURISDICTION: Civil Appeal No.
30 of 1958.
·,
'· ,,, ..
A ppPal by spepjal leave from the judgment and
order dated l\1ar9h: 24, 1955, of the Punjab High
Court in Civil Refe/ence No. 3 .of 1953.
Gopal Singh, for the appellants.
-K. N. Rajagopala Sastri and D. Gupta, fol" the respondent.
r960
Z oraster & Co.
v,
Contt'llission!!r. of
I ncbnic~tax
Zora~t~r 6 Co.
212
SUPREME COURT REPORTS
[1!161]
1960. August 17.
The Judgment of the Court was
delive~ed by
- v.
HIDAYATULLAH .T.-This appeal, by special leave
c,.,.,,.rnoua "! of this Court, is against the judgment and order dated
lncwu-lax
March 24, 1955, of the Punjab High Court by which
Hidayat1<1/alo 1- the High Court, purporting to a.ct under s. 66(4) of
the Indian Income-tax Act, ca.lied for a. supplemental
statement of the case from the Income-tax Appellate
Tribunal. The special leave granted by this Court is
limited to the question whether the High Court had
jurisdiction in this case to ca.II for the supplemental
statement.
The a.ssessee, Messrs. S. Zora.st-er & Co., .Ta.ipur,
consists of three partners. Two of them a.re copa.rconers of a. joint Hindu family, and the third is 11
stranger. They had formed this partnership in ,J nnc,
1940, for the manufacture and sale of blankets, felts
and other woollen a.rticlos. A deed of partnership was
also executed on March 16, 1944.
The a.ssessee.entered into contracts with Government for the supply of goods, and in the assessment year 1942-43,
Rs. 10,80,658-0-0 and in the assessment year 1943_-44,
Rs. 17,45,336-0-0 were assessed as its income by the
Income-tax Officer, Contractor's Circle, New Delhi.
The supplies to Government were madfl f. o. r. J a.ipur
by the a.ssessee, and payment was by cheques which
were received a.t Jaipur and wero endorsed in favour
of the joint Hindu family, which acted a.s the assessee's bankers. The contention of the a.ssessee was·
that this income was received a.t .Jaipur outside the
then taxable territories.
This contention was not
accepted by the Income-tax Appellate Tribunal,
Delhi.
·
The assessee then applied for a. reference to the
High Court under s. 66(1) of the Indian Income-tax
Act, and by its order dated December 10, 1952, the
Income-tax Appellate Tribunal referred tho following
question for the decision of the High Court:
" Whether on the facts and circumstances of the
case the profits and gains in respect of the ~ales ma.de
t-0 the Government of India. were received by the
aBSesaee in the te.xe.ble territories ? "
'
v
1 S.C.R. SUPREME COURT REPORTS
213
The Tribunal had stated in the statement of the case
r960
as follows:
Th
d b
h G
f Zoraster & Co.
"
e payment was ma e y. t e
overnment o
India by cheques drawn ·on ·the Reserve Bank .of Comm;s.~~ner of
India, Bombay Branch. These cheques were received
Income,tax
in Jaipur.".
It may 'be ·pointed out that in the contract of sale mdayatullah J.
between the·assessee and the Government of India,
the foliowing clause was inciluded to determine the
system of payment:
.
"21. System of payment :-Unless otherwise
agreed between the Purchaser _and the Contractor
payment for the delivery of the stores will be made by
the Chief Audit6r, Indian Stores Department, New
Delhi, by cheque on a Government treasury in India
or on a branch of the Imperial Bank of India or the
Reserve Bank of India transacting Government.
bu:::;iness."
¥
In dealillg with the Reference, the High Court
passed an order u.nder s. 66(4) of the Income-tax Act
observin_g,
,
" .. ~ .. .it would be necessary for the. Appellate
Tribunal to find, inter .alia, whether the cheques were
sent to the assessee firm by post or by hand and
· . what directions, if any, had the assessee firm given to
the Department in the matter".
The High Court thereafter remanded the· case to the
Tribunal for a supplemental statement of· the case on
the lines indicated. This order is questioned on the
authority of the decision of this Court in The New
Je'hangir Vakil Mills Ltd. v: The Commissioner of
Income-tax(') which, it is claimed, completely, covers
this case. 'In that case also; the High Court of Born-
. bay had called for a supplemental 'statement of the
case, and it was ·ruled by this Court that the·· High
Court had exceeded its jurisdiction.
Before dealing with this question, it is necessary to
· go back a little, an·d refer briefly to some cases decided
earlier than The New Jehangir Vakil Mills case (1) and
Jagdish Mills Ltd. v. Commissioner of Income-tax('),
on which reliance has been placed in this case. In
(1) [1960] l S.C.R. 249.
•
(2) [1960] l S.C.R.'236.
214
Sl:PRE~!E COl:HT RE'.PORTS
[ 1961 J
•
i96o
KP.Shav Mills Co., Ltd. v. Commissione·r of IncomeZorast" & Co tax('), thP. High Court of Bombay ca.lied for a. supplev.
mental Hta.t~ment of the case, but it expressed the
Commi<s•ouer of view that if a. cheque was received by a. creditor on a
Income-tu
British Indian Bank and he gave the cheque to his
bank for collection, the bank must bo treated a.a his
llidayatullah J. a.gent and that, on the l'ea.lisa.tion of the amount of
the eheque in the taxable territory, the creditor must
be regarded as having received it in the taxable
territory, even if he wa.s outside it.
In Sir Sabha
Singh v. Commissioner of Income-tax('), it was helri
by the Punjab High Court that whero cheques were
given to a. bank for purposes of collection, tho receipt
of the money was a.t the pla.ee where the hank on
which the cheques were drawn was situated.
These views found further amplification, and were
applied in two other cases by tho Boruba.y High Court.
They are Kirloskar Bros. Ltd. v. Commissioner of InI
come-tax(') and Ogale Glass Work.' Ltd. v. Commissioner of Income-tax('). In both these ca.sos, it was held
that 11,nless the payee expres~ly constituted the post
office a.a his a.gent, the mere posting of the cheque did
not constitute the post office the a.gent of the payee,
·and that the a.mount of the cheque was also received
at the place where tho cheque was received. In
Kirloskar Bros. Ltd. v. Commissioner of Income-tax('),
it wa.~ hold that t.he mere posting of the cheque in
Delhi was not tantamount to the receipt of the cheque
in Delhi, because the payee had not requested the
Government to send the cheque by post.
In Ogale
Glass Works case('), tho Bombay High Court asked
for a supplementary statement of the case from the
Tribunal as to whether there wa.s a.ny express request
by the a.ssesAee that the cheque should he sent by
post, and held that a.s thero was no such express
request, the receipt of the money was not where the
cheque was posted but a.t the place where the money
was received.
(1) (1950] 18 l.T.R. 407.
(2) [1950] 18 I.TR. 998. ·
(3) [1952] 21 I.T.R. 82.
(4) I. Tax Reference !'\o. I9 of 1949 or the Bombay H. c. decided on
September 17, 1951.
I S.C.R. SUPREME COURT REPORTS
215
The last two decisions of the Bombay High Court
r960.
were reversed by this Court, and it was held that an
' '
·
h
· "
h
b
Zoraster J;, CO.
mt1mat10n to t e payer "to remit . t e amounr y
cheque wa.s sufficient nomination of the post o.ffice as
v. ·
Conunissioner of
the agent of the payee: vide Commissioner of IncomeIncome-tax
tax v. Ogale Glass Works Ltd. (1) and Commissioner of
-. ·
Income-tax v. Kirloskar Bros. Ltd.(').
Later, the llidayatullah J.
principle was extended still further by this Court in
Jagdish Mills case(') . . It was held that where the
bills had an endorsement '" Government should pay
the amount due. by cheque". and_ the cheques were
received in full satisfaction unconditionally, this constituted a sufficient implied request for the purpose of
the application of the rule in Ogale Glass Works.case (1)
of this CourtP
·
Jagdish Mills case(') and the New Jehangir Vakil
Mills case(') were decided by this Court on the same
· day. · In the latter case, the Department had to deal
with a non-resident Company which, at all material
times, .was situate at Bhavnagar, one· of. the Indian
States. Cheques in payment for supplies to Govern-
.ment we1e sent from British India to· Bhavnagar. The
Department contended in. the case th~t though the
cheques were received at Bhavnagar, they were, in
fact, cashed in British India and until such encashment, income could not be said to have been received
but _that on. encashment in British India, the receipt
of income was also in British India. The Tribunal
held that the cheques having been received at Bhavnagar the income was also received there. In doing
so, the Tribunal followed the Bombay decision in·
Kirloskar Brothers case('). The Tribunal, however,
observed that if the Bombay view which was then
under appeal to this Court were not upheld, then an
enquiry would have to be made as to whether the
Mills' bankers at Ahmedabad acted as the Mills'
agents for collecting the amount due on the cheques.
The question whether the posting of the cheques from
British India to Bhavnagar at the request, express or
(1) [1955] I S.C.R. 185.
(2) (1954].25 I.T.R. 547.
(3) [1960] 1 s.c.R. 230.
(4) [1960J ' s.c.R .. 249.
(5) [1952] 211.T.R. 82.
I
216
SUPREME COt:RT REPORTS
[1961]
'960
implied, of the Mills or otherwise, ma.de any differz
I
, c
ence was not considered at a.nv stage before the case
oras " ~ o.
h d
h
H · h C
f -
v.
rea.c e
t e
1g
ourt o Bombay. This wa.s exComm;,.;.,,., of pressly found to be so by this Court in these words :
Income·t•x
" The only ground urged by the Revenue at all
material stages was that because the a.mounts which
Hidayatullah J. were received, from the merchants or the Government
we're received by cheques drawn ori banks in llrit.ish
India. which were
ultimately en ca.shed in British
India, the monies could not bo said to have been
received in llha.vnagar though the cheques were in
fa.ct received at Bha.vna.ga.r."
The reference was held back by tho Tribunal till the
decision of this Court in Ogale Gia.as W ork.s case (') and
K irkiskar Brother a' case(').
Even after ~e'eing that in
those two cases the request for payment by cheques
to be sent by post ma.de all the difference, the Tribunal did not frame its statement of the case (Ir the
question to include this aspect, because that aspect of
the matt~r was never considered before. The question
referred was thus , limited to the legal effect of the
receipt of the chequ"s at Bhavnagar without advert-
.cnce to the fact whether the cheques were so sent by
post at the request, express or implied, of the Mills.
The question framed was :
· " Whether the receipt of the cheques in Bhavnagar
amounted to receipt of the sale proceeds in Bha vnagar?"
The question as framed and tho statement which
accompanied it brought into controversy the only
point till then considered by the Tribunal and the
taxing authorities.
Whon the case was heard by it,
the High Court desired to consider it from the anglt>
of the Kirkiskar Brothe1·s(') and Ogale Glass Works (1) .
.. cases. It called for a supplemental statement of the
case. In doing so, the High Court went beyond the
ambit of the controversy as it had existed till then
and also the statement of the case and the question.
The High Court directed the Tribunal as follows:
.. "On the finding of the Tribunal that all the cheques were received in Bhavnagar, the Tribuual to find
(•) [1~55] I S.C.R. 185.
\2) (195<1] 25 l.T.R. 517·
1 S.C.R. SUPREME COURT REPORTS
217
what portion of these cheques were received by post,
'whether there was any request by the assessee, express
or implied, that the amounts which are the subject
matter of these cheques should be remitted to Bhavnagar by post."
·
In repelling the objection that such an enquiry was
alien to the point decided by the Tribunal and might
require fresh evidence, the High Court justified itself
by saying:
" But we cannot shut out the necessary inquiry
which even from our own point of view is necessary
to be made in order that we should satisfactorily
answer the question raised in the B.eference. It-must
not be forgotten that . under section 66(4) of the
'Income-tax Act we have a right independently of the
conduct. of the parties to direct the Tribunal to state
further facts so that we may properly exercise our
own advisory j urisdictibn."
,
This Court pointed out that the High Court exceed.
e<l its jurisdiction under s. 66(4) of the Indian Income.
tax Act. It was observed :
.
"If the que~tion actually referred· does not brihg
out clearly the real ·issue between the parties, the
High Court may reframe the question so that the
matter actually agitated before the Tribunal niay be
raised before the High Court .. But s. 66(4) does not
enable the High Court to raise a new question of 'law
which does not arise out of the Tribunal's order·an<l
direct the Tribunal to investigate new or further·facts
necessary to determine this new question.which had
not been referr~d to it under s. 66(1) or s. 66(2) and
direct the Tribunal to submit a supplementary- state.
ment of the case." .
It was also pointed out that the facts admitted and/
or found by the Tribunal could. alone b6 the founda:'
. tion Of the question of law which might be said to
arise out of the Tribunal's order. The case thus set
two limits to the jurisdiction of the High Court under
s. 66(4), and they were that the advisory jurisdiqtion
was confined (a) to the facts on the record and/or
found by the Tribunal and (b) the question wl!ich
28
.. '
Zoraster &- Co.
v.
Conimi.>sioner of
lnco1ne·tax
fl idayatullah J,
218
SCPHEJ\JE COGRT REPORTS
[1961]
196o
would arise from the Tribunal's order. It was pointed
.
, .
out by this Court that it was not open to the High
/om':'. '' c,. Court to order a fresh enquiry int-0 new facts with a.
c0 ,,,,,.;,.,0 ,," of \'iew to amplifying the record and further that it was
Jn,·o"" '"·' · f'qually not open to the High Court to decide a question of law, which did not arise out of the Tribunal's
Hid«'·"'"ll"h J order. This was illustrated by comparing the question a.s framed by the Tribunal with the question
which 'the High Court desired to decide. Whereas
the Tribunal had only referred tht1 question:
" \Vhethcr the receipt of the cheques at Bha.vna.gar amounted to receipt of sale proceeds in Bhavnagar ?",
what the High Court intended deciding was:
"Whether the posting of the cheques in British
India. at the request express or implied of the appellant, amounted to receipt of sale proceeds in British
India.?"
These were two totally different questions, and it was
held that the High Court could not decide a. matter
which was different from that decided by the Tribunal, nor ca.II for a. statement of the case bearing on this
new matter.
The proposition la.id down iu the Jehangir Vakil
Mills case (1), finds support from y••t anotht'r case of
this Court decided very recently.
In K usumben
D. Mahadevia v. Commissioner of Income-tax, Bcnnbay ('), it was observed:
"In our opinion, the objection of the assessee is
well-founded.
The Tribunal did not address itself to
the question whether the Concessions Order applied to
the asscssee.
It decided the question of assessa.bility
ou the short ground that the income had not a.risen in
Baroda. but in British India.. That aspect of the matter ha.a not been touched by the Bombay High Court.
The latter has, on the other hand, considered whether
the Concessions Order applies to the a.ssessee, a. matter not touched by tho Tribunal. Thus, though the
result is the same so far as the assessment is concerned, the grounds of decision a.re entirely different.
·················································· .................. .
1 S.C.R. SUPREME COURT. REPORTS
219
Sect.ion 66 of the Income-tax Act which confers
jurisdiction upon the High Court only permits a reference of a question of law adsing out' of the order of
the Tribunal. It does not confer jurisdiction on the
High Court to decide a different question of Jaw not
arising out of such order. It' is possible that the same
·question of law may involve different approaches for
its solution, and the High Court may amplify the
question to take in all the approaches.
But the question must still be the one which was before the Tribunal and was decided by it. It must not be an entirely
different question which the Tribunal. never considered."
'It follows from this t.hat the enquiry in such cases
must be to see whether the question' decided by the
.Tribunal admits the consideration of the new point as
an integral or even an incidental part thereof. Even
so, the supplemental statement which the Tribunal is
directed to submit must arise from the facts admitted
and/or found by the Tribunal, and should not open
the door to fresh evidence. The fact that in Ogale Glass
Works case (1), the Bombay High Court had asked for
a supplemental statement in the same way as in the
Jehangir Vakil Mills case('), and this Court did not
rule out.the new matter, cannot help the- assessee in
the present case, because the jurisdiction of the High
Court was not questioned, as it had been dorie in the
Jehangir Vakil Mills case, or has been done here. We
have thus to see whether in this case· the question
which was decided and which has been referred to the
High Court admits the return of .the case for a supplemental statement on the lines indicated by the High
Court in the order under appeal.
At the very. start, one notices a difference in the
question of law in this case and the Ogale Glass Works
case ('), on the one hand, and the question of Jaw in
the Jehangir Va.kil Mil~ case('), on the other. 'In the
former two cases, the question is very widP, while in
the latter it is extremely narrow. This can- be seen
by placing the three questions sirle by side as below:
(1) I. Tax Reference No. 19 of 1949 of the Bombay lI. C. decided on
S•i>~•mbet i7. i95t.
·(2) [1960] I S.C.R. 249.
(3) [1955] I S.C.R. 185.
Zorasler &
C~.
v.
Con111tissiontr of -
I ticonu~tax
Hidayafullah- j.-
220
SUPRE:\IE COUitT REPOHTS
[I!l61]
,,,60
.Jehangir Vakil Mills case('): " Whether the receipt
of the cheques in Bha.vnagar a.mounted
to
receipt of the sale proceeds in Bhavnaga.r ?"
" Whether on the facts
of the case, .income,
profits a.nd gains in
respect of sales ma.de
to the Government of
India was received in
British India. within
the meaning of Section
4(l)(a.) of the Act?"
"Whether.on the facts
a.nd circumstances of
the case
the profits
and gains in re8pect of
the sales ma.de to the
Government of India
were recci ved by the
assessee
in
taxable
territories ?"
Lorastrr {?· Co.
v.
Co111111i.~.~io>ur nf
!tu:omt:-tax
H 1da).:alullah J. Ogale Glass Works case (') :
This case:
It is thus quite plain that tho question as framed
in this case ca.n include an enquiry into whether there
wa.s a.ny request, express or implied, that the amount
of the bills he paid by cheques so a.s to hring the matter within the dicta of this Court in the Ogale Gloss
Works case (') or Jagdish !.fills case('), The first
limit to the jurisdiction of the High Court as la.id
down by this Court is thus not exceeded by the High
Court in exercising its powers under s, 66(4) of the
Income-tax Act,
The question is wide enough to
include the alternative line of approach that if there
was a request, express or implied, to send the a.mount
due under tho bills by cheque, the post office would bo
the a.gent of the a.ssessee, a.nd the income was received
' in the taxable territory when the cheques were posted.
(1) [1¢oj 1 S.C.R. 249. .
(2) [1955] I S.C.R. 185.
(3) [ r¢o] 1 S,C:R. 236.
1 S.C.R. SUPREME COURT REPORTS
221
The next question is whether the High Court has
1960
t. ransgressed the second limitation implicit is s. 66(4),
Zoras/er 6" Co.
that is to say, that the q,uestion must arise out of the
facts admitted and/or found by , the Tribunal.
The commi,:ioner of
lligh Court has observed that,
h;conu-tax
" ...... _ .. .it would be necessary for the Appellate
Tribunal fo find inter alia whether the cheques were Hidayatullah J.
sent to the assessee-firm by post or by hand and what
directions, if any, had the assessee-firm given· to the
Department in that matter."
If the Tribuna;J has to make a fresh enquiry leading
to the admission of fresh evidence on the record, then
this direction offends against the ruling of this Court
in_ the Jehangir Vakil Mills case('). If, however, the
direction be interpreted to mean that the Tribunal in
giving the finding must confine itself to the facts
admit_ted and/or found by it, the direction cannot be
described ·as in excess of the jurisdiction of the High
Court. It would- have. been better if the High Court
had given directions confined to. the record of the
case before the Tribunal; but, in the absence of
anything expressly to the contrary, we cannot hold
that the direction would lead inevitably to the admitting of fresh evidence. This, at least, now cannot be
done, since the· Jehangir Vakil Mills case (1); has prohi,bited the admission of fresh evidence. Im our opinion, the present case does not fall within the rule in
the Jehangir .Vakil Mills case('), and is distinguishable.
In the result, the appeal fails; and is·dismissed with
costs.
·
Appeal dismissed.