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PETITIONER: COMMISSIONER OF INCOME-TAX, MADRAS
Vs.
RESPONDENT: K. R. M. T. T. THIAGARAJA CHETTY & CO.
DATE OF JUDGMENT: 14/10/1953
BENCH: HASAN, GHULAM BENCH: HASAN, GHULAM SASTRI, M. PATANJALI (CJ) DAS, SUDHI RANJAN BOSE, VIVIAN BHAGWATI, NATWARLAL H.
CITATION: 1953 AIR 527 1954 SCR 258 CITATOR INFO : R 1954 SC 470 (40) F 1957 SC 49 (35) D 1960 SC 703 (3,4) RF 1961 SC 204 (10) RF 1986 SC 757 (6,14,46) RF 1991 SC 513 (7)
ACT: Indian Income-tax Act (XI of 1922), ss. 4(1)(b),13- Commission agency-Accounts kept on mercantile system- Commission credited to agent and debited as business expenditure, but withheld and carried over subsequently to suspense account pending disputes-Whether income has accrued-Computation of profits, whether condition precedent to accrual.
HEADNOTE: Where, under the terms of a managing agency agreement the assessee firm who were the managing agents of a company were entitled to a certain percentage of the profits as their commission and in the books of the company maintained by the firm a sum of Rs. 2,26,850 odd was shown as commission due to the firm on the profits for the year 1941-42 and the said sum was also debited as an item of business expenditure and credited to the managing agents’ commission account, but the aforesaid sum was subsequently carr...