| Case ID |
092d62b8-e69b-44d0-8ead-d50cb1f7424c |
| Body |
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| Case Number |
MISC. CIVIL CASE No. 59 OF 1966 |
| Decision Date |
Oct 04, 1967 |
| Hearing Date |
|
| Decision |
The court decided in favor of the assessee, holding that the profits made by the assessee were not received in taxable territories. The court referenced a similar case, CIT v. Laxmichand Muchhal, to support its findings. It was determined that the bank acted on its own behalf and not as a collecting agent for the assessee, meaning the sale proceeds were received by the assessee in a non-taxable territory. As a result, the profits could not be assessed under section 4(1)(a) of the Indian Income-tax Act, 1922. The decision emphasized the importance of the location of the receipt of sale proceeds in determining tax obligations. |
| Summary |
This case revolves around the taxation of profits under the Income-tax Act, 1961, specifically concerning the place of accrual of income. The assessee-firm, engaged in the business of selling and exporting cloth, operated from Indore, which was classified as a non-taxable territory during the relevant assessment year of 1947-48. Upon receiving allotment orders from purchasers in taxable territories, the firm purchased cloth and stored it in their godowns before dispatching it to the buyers. The issue at hand was whether the profits from these transactions could be taxed in India. The Income-tax Officer initially assessed the profits as taxable, asserting that proceeds were received in taxable territories. However, upon appeal, the Tribunal found otherwise, stating that the profits were not received in taxable territories. The court ultimately ruled in favor of the assessee, reinforcing that the profits were realized in a non-taxable territory, thereby exempting them from Indian tax laws. This case highlights the critical aspects of tax law concerning the jurisdiction of income receipt and has implications for similar cases of cross-border transactions. |
| Court |
Madhya Pradesh High Court
|
| Entities Involved |
Not available
|
| Judges |
P.V. Dixit, C.J.,
R.J. Bhave, J.
|
| Lawyers |
Not available
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Shivnarayan Harigopal
|
| Citations |
1968 SLD 181 = (1968) 70 ITR 545
|
| Other Citations |
CIT v. Laxmichand Muchhal [1960] 61 ITR 555 (MP)
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
5,
4(1)(a)
|