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TMI Blog1953 (1) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... er and lender cannot ordinarily come about by mere inaction. The clause in the Articles of Agreement quoted above was relied on for the purpose of showing that there was such an agreement in the case. We are unable to construe the provisions in that way. They merely give the managing agents a right to receive their commission at a certain time. If the money is not paid in time it lies with the assessee as a debt due to the agents. We agree with the High Court that it is a debt under Rule 2 and not a borrowing under Rule 2A. Appeal dismissed. - - - - - Dated:- 16-1-1953 - Judge(s) : MEHR CHAND MAHAJAN., N. H. BHAGWATI., S. R. DAS., VIVIAN BOSE JUDGMENT The judgment of the Court was delivered by BOSE, J.--This appeal comes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) to have resulted, as they accrued, in a corresponding increase or decrease, as the case may be, in the capital employed in the business. " The dispute centres round the words we have underlined. The learned counsel for the assessee contends that the words only govern clause (a) and not clause (b). The department has accepted in this case that the profits accrued at an even rate because the assessee has not rebutted that presumption nor has the department attempted to do so. The learned counsel for the assessee contends that that being so, the department is bound to apply clause (b) because the words we have underlined only govern clause (a) and not clause (b). His contention is that Rule 5 is an artificial rule which creates a fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are asked to answer as follows :-- " Whether on a true construction of Rule 5 of Schedule II of the Excess Profits Tax Act the expression 'so far as the contrary is shown' applies only to sub-clause (a) or also to sub-clause (b) ? " We agree with the answer given by the High Court, namely that the words "so far as the contrary is shown" apply to both clauses (a) and (b). The next question is about the managing agency commission. Under the Articles of Agreement entered into between the assessee and its managing agents the agents were to be paid a certain commission and the articles provided :-- " The said commission shall be due to the said firm yearly on the thirty-first day of December in each and every year during the conti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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