9911796707
TMI Blog1995 (2) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... M. B. SHAH J.--For the assessment year 1983-84, the Tribunal, Ahmedabad Bench "A", has referred the following question for our opinion, under section 256(2) of the Income-tax Act, 1961 ("the Act") : " Whether the Appellate Tribunal was right in law in holding th at the assessee had been maintaining agency for promotion of sales outside India within the meaning of section 35B(1)(b)(iv) and whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also found that the commission was paid outside India. The relevant part of sub-clause (iv) of clause (b) of sub-section (1) of section 35B, as it stood at the relevant time, is as under : "(b) The expenditure referred to in clause (a) is that incurred wholly and exclusively on--.... (iv) maintenance outside India of a branch, office or agency for the promotion of the sale outside India of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lsbury's Laws of England, Third edition, Volume I, paragraph 351, at page 146, with regard to "Agency" it is observed as under : " 351. Agency dependent on true nature of relationship.--An agent primarily means a person employed for the purpose of placing the principal in contractual or other relations with a third party and it is essential to an agency of this character that a third party should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elation exists in any situation depends not on the precise terminology employed by the parties to describe their relationship, but on the true nature of the agreement or the exact circumstances of the relationship between the alleged principal and agent." In the same paragraph, it is further stated as under : " The essence of the agent's position is that he is only an intermediary between two o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of CIT v. Pooppally Foods [1986] 161 ITR 729 ; and (3) The Kerala High Court in the case of Srivilas Cashew Co. v. CIT [1992] 196 ITR 887. Considering the aforesaid discussion and the ratio laid down in the aforesaid decisions, the question raised in the present reference is answered in favour of the assessee and against the Revenue. The reference stands disposed of accordingly with no order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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