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TMI Blog1969 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year is 1950-51. The corresponding previous year ended on September 30, 1949. At first the assessee-company made a debit entry in its account books for the sum or Rs. 55,359 towards commission of the managing agent. But the managing agent agreed to forgo the commission. Consequently, entries were reversed in the books of the assessee-company. The result was that there was no debit under this head in the profit and loss account of the assessee-company. The question arose at the time of the deduction of Rs. 55,359 as expenditure during the previous year. The Income-tax Officer decided that the assessee-company was not entitled to any such deduction. This decision was confirmed in appeal by the Appellate Assistant Commissioner and by the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The fact that the amount of Rs. 55,359 was included in the assessment of the managing agent for the assessment year 1950-51 has no bearing on the assessment of the assessee-company for the same year. The learned counsel for the assessee suggested that consequent adjustment in the books of the assessee-company might have taken place some time after September 30, 1949. No such contention appears to have been advanced before the Tribunal. Nonetheless we have considered this point raised on behalf of the assessee. In Kothari Mehta and Co. Ltd. v. Commissioner of Income-tax, it was held by the Madras High Court "waiver of managing agency commission by a managing agent after such income has accrued due to him under the terms of the managin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at effect might, in certain circumstances, have been made in the books of account. We note that in that case the accounting period ended on March 31, 1948, and the assessee-firm gave up the major part of its commission in December, 1948, several months after the expiry of the accounting period. Yet the Supreme Court held that the assessee-firm was liable to be taxed on the lower figure only. The principle of that case can well be applied where the Income-tax Officer has to consider the question of allowance for expenditure claimed. The Income-tax Officer had to ascertain the actual expenditure incurred by the assessee during the year ending September 30, 1949. Admittedly, the assessee-company in the instant case did not incur any expend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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