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PETITIONER: THE COTTON AGENTS LTD., BOMBAY
Vs.
RESPONDENT: COMMISSIONER OF INCOME-TAX,BOMBAY.
DATE OF JUDGMENT: 03/05/1960
BENCH: DAS, S.K. BENCH: DAS, S.K. HIDAYATULLAH, M.
CITATION: 1960 AIR 1279
ACT: Income-tax-Managing Agency Agreement-Proper construction of- Commission on sale proceeds of the managed company-Time of accruing.
HEADNOTE: Messrs. Shivnarayan Surajmal Nomani were the managing agents of the New Swadeshi Mills of Ahmedabad Ltd. The Nemani group and the appellant-company which is the assesses 811 held a substantial number of shares of the said mills. Sometime in 1944 some difference arose between them and it was decided that the Nemani group should sell its block of shares to the appellant company at an agreed price and then the appellant company would become the managing agents of the mills company on payment of Rs. 5,00,000 to the Nemani group and would be entitled to the emoluments of the managing agents as from April 1, 1944. The relevant portion of the Managing Agency Agreement ran thus:- " (2) The remuneration of the agents as such agents of the company as aforesaid shall be as follows:- A commission at the rate of three and a half per cent. on the gross proceeds of all sales of the yarn, cloth, waste and other articles manufactured by the company earned in any year or other period for which the accounts of the company are made up ...