HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Madras v. Mysore Chromite Ltd.
Civil Appeal 117 of 1953
[1955] 1 SCR 849 ·
Income-tax Act 1922, sections 4, 66(1) · Sale of Goods Act, sections 4, 18, 23, 25
Sources & disclosures includedDownload original judgment / order
5-judge bench · Mehr Chand Mahajan C.J. · S. R. Das · Ghulam Hasan · Bhagwati · Venkatarama Ayyar
Assessment years: 1939–40 through 1942–43
01 · Facts of the case
Mysore ore exports were shipped FOB Madras, with seller-held bills of lading and payment through London irrevocable credits. The seller negotiated documentary drafts with its Madras bank before London acceptance and receipt.
Source: Primary report: SCR 852–855
02 · Discussion by the Hon’ble Court
FOB delivery and passage of risk were not conclusive where the seller reserved disposal through title documents. Property could not pass before London acceptance and delivery of documents. The Madras bank’s advance to its customer was not payment by the purchaser; the sale price was first received by the seller’s London agent.
Source: Primary report: SCR 856–861
03 · Judicial decision
Both referred questions were correctly answered in the assessee’s favour: profits arose and were received outside British India. Revenue’s appeal dismissed with costs.
Source: Primary report: SCR 861
04 · Outcome / in whose favour
Assessee succeeded.
Source: Primary report: SCR 861
05 · AKHB REVIEW POINT
Distinguish negotiation of export drafts as finance from actual receipt of price. Examine reserved disposal and contractual banking roles, rather than relying only on the FOB label.
Source: Primary report: SCR 856–861
Source & verification
Download original judgment / order · Open cited source rendition
Complete 13-page primary report, including any adjoining report boundary fragments retained in the exact source bytes.
Statutory scope
Historical predecessor legislation only; this is not a decision applying the Income-tax Act, 1961. Verify the applicable statutory text separately.
Later treatment
Source checked 2026-10-21. Subsequent treatment and current-law applicability have not been comprehensively checked.
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AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from an identified primary report. Independent human review is not represented.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court’s holding. No current-law clearance is claimed.