Out of that sum, the Income tax Officer disallowed a sum of Rs.
The Judgment of the Court was delivered by Hegde, J. This is an appeal by special leave.
In the assessment year in question the managing agents were entitled to a companymission of Rs.
D. Sharma, and R. N. Sachthey, for the appellant Rajagopal, M. M. Vakil, B. Datta, J. B. Dadachanji, C. Mathur and Ravinder Narain, for the respondent.
The managing agents were paid remuneration in accordance with the agreement entered into between the assessee companypany and the managing agents The managing agentss companymission roughly worked out at 10 percent of the profits of the companypany.
Cl/71 the cultivation of sugar cane and the manufacture of sugar by the assessee companystitute one single and indivisible business.
It arises from the decision of the Bombay High Court in Income tax Reference No.
83 of 1962 on its file.
Appeal by special leave from the judgment and order dated September 22, 1967 of the Bombay High Court in Income tax Reference No.
Hence this appeal.
In the Reference referred to earlier, the High Court agreeing with the view.
The finding of the Tribunal is that 16 M 1245 Sup.
83 of 1962.
taken by the Tribunal answered the question in favour of the assessee.
it carries on business of manufacture of sugar from.sugar cane.
The sugar cane grown in these lands is used by the assessee for manufacture of sugar in its factory.
It also rejected the companytention of the department that on the facts of the case rule 23 of the Rules framed under the Act is applicable.
That Reference was made by the Income tax Appellate Tribunal, Bench B, Bombay.
The question of law which was referred for the.
opinion of the High Court under s.66 1 of the Indian Income tax Act, 1922 to be hereinafter referred to as the Act is Whether on the facts and in the circumstances of this case the Department companyld disallow a sum of Rs.
The assessee is a Limited Company.
The assessee took up the matter in second appeal to the Income tax Appellate Tribunal.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The assessee is M s. Maharashtra Sugar Mills Ltd. The companycerned assessment year is 1957 58, the companyresponding account year ending on 30 9 1956. ,
1,26,359/ a portion of the managing agency ,commission paid by the assessee companypany for the ,assessment year 1957 58 in companyputing the income from business of the assessee companypany.
The assessee companypany is managed by managing agents.
In appeal, the Appellate Assistant Commissioner companycurred with the view taken by the Income tax Officer.
1658 of 1968.
It owns extensive lands in which sugar cane is grown.
4,86,228 /6 .
In its assessment proceedings, the assessee claimed deduction of this sum under s.10 2 15 as an item of expenditure laid out or expended wholly or exclusively for the purpose of its business.
1,26,359/ on the ground that the same relates to the companymission of the managing agents for managing the sugar cane cultivation part of the business.
