9911796707
TMI Blog1982 (4) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department's contention that the sum of Rs. 1,01,779 constituted income in the, hands of the assessee ? " Briefly stated the facts are these. The assessee entered into a sole selling agency agreement with M/s. Motors Instruments P. Ltd. (hereinafter referred to as " the company ") on April 1, 1960. The company was a manufacturer of meters. It was agreed between the parties that these meters would be sold through the sole selling agency of the assessee. The two relevant terms of the agreement between the parties read as under: " The company will submit prices to the selling agents, who, in turn, will quote their own prices to customers or sub-agents/distributors. It is agreed that the selling agents shall sell meters and other produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the company protested against the assessee charging higher prices and claimed that the benefit of the higher prices charged by the assessee should have been passed on to the company, the manufacturer of the meters. The assessee in reply to this letter claimed in its letter of April 8, 1963, that the company itself had not been supplying sufficient number of meters with the result that the 10 per cent. commission could not be regarded as adequate to meet the expenses which the assessee had to meet in conducting the sales of the meters. It was also complained by the assessee that the delivery of meters was not according to the time Schedule. The assessee contended that losses incurred by it on account of erratic supply of meters and non-s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuine debit entry. In this view of the matter the reference made seems to be uncalled for. Learned counsel for, the Revenue, however, urged that reading the clauses of the agreement dated April 1, 1960, it was possible to say that the assessee was entitled to sell the meters at a higher price than the price fixed by the company and, therefore, the higher price received by it or the difference between the higher price and the price fixed by the company would be income of the assessee. There is no force in this contention. On a plain reading of the clauses of the, agreement, specially the ones which we have extracted earlier, it is obvious that the only income which the assessee could derive was the 10 per cent. commission. If he charged a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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