AZAMJAHI MILLS LTD. HYDERABAD vs THE COMMISSIONER OF INCOME TAX,HYDERABAD

The Supreme Court held that the sale proceeds received by the assessee, a textile mill, from the Government of India were subject to Indian income tax as they were deemed to have been received in British India, despite the registered office being in Hyderabad State. The Court clarified that the mere posting of a cheque does not constitute delivery unless there is an agreement or request for such payment by cheque. In this case, the understanding between the Government and the assessee indicated that payments were to be made by cheque sent from British India, thus establishing the jurisdiction for tax purposes under the Income Tax Act.