Judgement

BHAGWATI J. - This is an appeal from the judgment and order of the High Court of Judicature at Bombay upon a reference by the Income-tax Appellate Tribunal under S. 66 (1) of the Indian Income-tax Act, 1922, whereby the High Court upheld the decision of the Appellate Tribunal that two amounts of Rs. 12,68,480 and Rs. 4,40,878 were the sale proceeds of goods sold by the appellant to merchants in British India, were received in British India and were liable to income-tax in British India.

2. The appellant is a company registered in the Baroda State as it then was prior to its merger with India. It manufactures textile goods in Petlad in the Baroda state and after the goods are manufactured they are sold by the Company ex-mills. The Company employs Messrs. Jagmohandas Ramanlal and Co. as guaranteed brokers. That firm guarantees the sale price of goods sold by the company ex-mills to the purchasers from Ahmedabad and receives commission as consideration for the guarantee and the work which it does for the company. The company is a nonresident and its accounts are maintained according to the mercantile system.

3. In the assessment year 1942-43 (the previous year being the calenda