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TMI Blog1934 (9) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act, 1922, raising the questions (1) whether in the circumstances of the case and in view of the provisions of Sections 4(J) and 10 of the Act, the assessees have been correctly assessed on the total amount of Rs, 97,882 received by them as profits and gains of the business carried on by them as managing agents of a certain company, and (2) whether under the provisions of Section 10 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid away to third parties. It has not been argued that the sums paid to third parties come within any of the various deductions allowed by the Indian Income Tax Act. But the argument has been that the sums paid to third parties; never were the income, profits or gains of the assessees within the meaning of Section 4 of the Act. The Income Tax Commissioner relies on a decision of the Privy Council, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits, whereas here it is a proportion of the income. But whether the obligation to pay is based on the gross income or on the net profits, cannot in my view affect the question. I think, therefore, that the case is really covered by that decision. But Mr. Coltman, in support of his contention that the sum paid to third parties is not part of the income of the assessees, has relied on a decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case than to those in the Raja's case, because in the Raja's case there was a charge on the property, whereas in the present case, as in the Pondicherry case, there is no charge, there is only a covenant to pay. It seems to me, therefore, that it is the Pondicherry case which governs the case before us, and we must follow that case. The questions, therefore, will be answered, No. 1 in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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