KESHAV MILLS LTD. vs COMMISSIONER OF INCOME-TAX, BOMBAY

The Supreme Court held that the amounts received by R & Co. and banks on behalf of a non-resident company for goods sold in British India constituted sale proceeds assessable under Section 4(1)(a) of the Indian Income-tax Act, 1922. The Court clarified that while the company maintained its accounts according to the mercantile system, the amounts were not deemed received by the company until they were collected by R & Co. and the banks. The dissenting opinion noted doubts regarding the applicability of the mercantile system for non-residents maintaining accounts outside India.