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TMI Blog1968 (11) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... nal is correct ? " The question arises out of assessments made for the years 1952-53 and 1953-54 on the assessee, which is a limited company growing sugarcane and manufacturing sugar. The company which originally entered into a managing agency agreement between itself and Raja Dhanrajgir, subsequently appointed the Industrial Trust Fund of H.E.H. the Nizam's Government as managing agents. Under the original managing agency agreement entered into between the company and Raja Dhanrajgir, dated April 18, 1937, who by an indenture of transfer dated October 17,11937, appointed the Industrial Trust Fund, the managing agents were entitled to 10% of the net profits of the company as provided in clause 2(b) of the agreement and if in any year there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e managing agency agreement for the purpose of calculating depreciation and therefore the amounts paid by the company to its managing agents was a deductible expenditure. It also held that the managing agency commission as claimed has been actually paid to the managing agents and the said payment was a bona fide payment. On behalf of the department the learned advocate, Sri Ananta Babu, contends that the Tribunal is wrong in interpreting clause 2(b) in the manner it did, because it ignored the term which according to him emphasised that depreciation to be allowed is in accordance with the Indian Income-tax Act in force from time to time. Sri Ramachandra Rao, on the other hand, not only supports the interpretation given by the Appellate Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole period of this agreement....... On a prima facie reading of this clause, we are inclined to agree with the interpretation placed by the Tribunal. The contention before the Tribunal was that the words "from time to time" referred to the depreciation that would be allowed from time to time under the Income-tax Act and that if there are any changes in the types of depreciation deduction should be made accordingly. The Tribunal in our view quite properly insisted on placing the construction and giving full force and effect to the subsequent words in the brackets in relation to the Indian Income-tax Act (in force at the date hereof) as meaning that depreciation to be allowed from time to time would be in accordance with the depreciation a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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