1953 (10) TMI 8 - SC - Income Tax

Addition - Indian State Managing Agent - Commission - whether this whole amount was assessable and secondly whether the firm was entitled to exemption of the sum of Rs. 81, 023 - Upon the first question both the learned Judges agreed that the sum of Rs. 2, 20, 702 was rightly assessed to tax in that there was nothing to prevent the firm from drawing the amount from the company which stood credited in their favor It is contended that this commission accrued in what are now called B States but it was not brought into British India and hence it was not income which had accrued in British India - The short answer to this argument is that the business of the company was carried on in British India that the commission earned by the firm on the profits made by the company in the States arose out of one indivisible agreement to charge the reduced commission of 5 per cent. on the profits of the company and that the managing agents had been doing the business of the agency in British India and not in the States - Appeal is dismissed

Summary

The Supreme Court upheld the assessment of a firm's commission as taxable income for the assessment year 1943-44. The firm's argument that a portion of the commission accrued in Indian States and was not assessable was rejected. The appeal was dismissed, and the appellant was ordered to pay the respondent's costs. (Case citation: 1953 (10) TMI 8)