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Interpretation of Section 12A of the Income-tax Act regarding filing of declarations for managing agency commission shares and its application in subsequent assessment years. Analysis: The judgment dealt with the interpretation of Section 12A of the Income-tax Act concerning the filing of declarations for managing agency commission shares. The assessee, a firm acting as managing agents, had agreements to share commission with other parties. The key issue was whether a declaration filed for one assessment year sufficed for subsequent years. The Tribunal found the agreement was made for adequate consideration, but the question was the necessity of filing a declaration each year. The assessee contended that once a declaration was filed, it need not be done annually. However, the Court held that each assessment year is self-contained, requiring a fresh declaration to claim exemption under Section 12A. The intention of the Legislature was to file a declaration for each assessment year to show the proportion of commission shared. The Court compared this requirement to the obligation under Section 43, emphasizing the self-contained nature of each assessment. The judgment emphasized that the assessee must claim the right under Section 12A for each assessment year separately. It was held that the declaration filed for one year does not endure for subsequent years, and a fresh declaration is necessary for each assessment. The Court rejected the argument that an agreement to share commission for multiple years should suffice, highlighting potential practical difficulties and the legislative intent behind the requirement of filing a declaration annually. The Tribunal's view that the declaration filed for one year does not apply to subsequent years was upheld by the Court. Regarding a further question raised by the assessee on deduction under Section 10(2)(xv) for the shared commission, the Court found it unnecessary to decide as the Tribunal had already ruled that Section 10(2)(xv) did not apply based on the facts presented. The Tribunal had determined that the mere existence of an agreement for sharing commission did not prove that the sharing was solely for the assessee's business purposes. The Court concurred with the Tribunal's decision that the claim under Section 10(2)(xv) required additional proof beyond the existence of a sharing agreement. The Court held that no question of law arose from the Tribunal's decision on this matter. In conclusion, the Court answered the first question by stating that a fresh declaration is required for each assessment year. The second question was directed to the judgment for details. The assessee was ordered to pay costs, and the notice of motion was dismissed with costs, thereby upholding the Tribunal's decision and providing clarity on the interpretation and application of Section 12A in the context of managing agency commission shares.
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