9911796707
TMI Blog1971 (12) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... sively for the purpose of its business ? " The assessee is a firm operating as shipping, clearing and forwarding agents at the Machilipatnam Port. As it was in need of securing business from M/s.General Produce Co. Ltd., it had approached M/s. Mineral Products & Co., who after the necessary negotiations procured the business to the assessee. The business procured consisted in the right of the assessee in carrying out the job of clearing and forwarding iron ore belonging to M/s. General Produce Co. Ltd. for shipment from Machilipatnam Port, and in consideration of such service the General Produce Co Ltd. agreed to pay the assessee-firm handling charges at Rs. 8.87 per ton including port dues, stevedoring and trimming, undertaking the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as ordinary brokerage paid for securing additional business and as such constitutes revenue expenditure allowable under section 10(2)(xv) of the Indian Income-tax Act of 192. Hence, this reference. The assessee-firm had entered into an agreement with M/s. Mineral Products & Co. of Calcutta to procure only the business relating to the export of iron ore from Machilipatnam Port belonging to M/s. General Produce Co. Ltd., and had undertaken to pay brokerage of Rs. 1.25 per ton in relation to that contract. This obligation to pay brokerage is only with regard to this particular contract relating to the goods of General Produce Co. Ltd., is to run concurrently with it and is to last only for the duration of that contract. Admittedly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement with another for procuring him the licence for exporting goods to Ceylon and had undertaken to pay 50 per cent. of the profits realised and when he claimed the amount paid to the person who procured him the business as revenue expenditure, the court rejected that contention and held that what was paid was really in form and in substance a division of ascertained profits and as such the assessee was not entitled to any deduction under section 10(2)(xv) of the Indian Income-tax Act of 1922. This decision has no bearing on and has no similarity at all to the facts of the present case. In Chintalapudi Ranganayakulu v. Commissioner of Income-tax the assessee had entered into lease agreements for purposes of mining and had paid brokerage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd this obligation was to run concurrently with the contract with M/s. General Produce Co. Ltd., and admittedly this lasted only for one year and eight months. It cannot be contended that this had resulted in an expansion of the assessee's business and has, therefore, brought benefit of an enduring nature as was held by the Income-tax Officer. If that were so, commission or brokerage paid for every transaction in the course of business will be exigible to tax as an expenditure of capital nature. Nor can this be held to be comparable to an acquisition of goodwill as was done by the Appellate Assistant Commissioner, as the transaction has not the impress of durability and in fact it was terminable and would ensure only for the period of contr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
