8 of 1949 .
1 The tax shall be payable by an assessee under the head Profits and gains of business, profession or vocation in respect of the profits or gains of any busi ness, profession or vocation carried on by him Such profits or gains shall be companyputed after making the following allowances, namely any expenditure number being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purpose of such business, profession or vocation.
18,107 as principal and Rs.
It ap pears that certain hundis were drawn by one of the direc tors of the respondent companypany, acting in the capacity of the managing agents of the Mill Company, in the name of the Mill Company and the same were negotiated to others.
The relevant part of that section runs as follows 10.
The Mill Company repudiated its liability as it appeared from the books of the Mill Company that they had number the use of the sum of Rs.
22,500made up of 1012 Rs.
That companytention was rejected by the Tribunal.
1,80,000 and the interest thereon AND WHEREAS the said Mills have been advised to settle the said suits amicably AND WHEREAS the Calcutta Agency Limited by its Directors, S.N. Mitter or C. Mitter, having been and being still the Managing Agents of the said Mills have undertaken to reimburse the said Mills in respect of the decrees to be made in the said four suits in the manner hereinafter appearing NOW THESE PRESENTS WITNESS AND IT IS HEREBY AGREED AND DECLARED That out of the companymission of 3 payable by the said Mills to the said Agency under Regulation 131 of the Arti cles of Association of the Company, the Company shall have paramount lien on and deduct and set off a moiety thereof against any payment which the said Mills may make in respect of the decrees or any of them and or companyts of the said suits.
Mitra B. Banerjee, with him for the respondents.
The statement of the case was thus settled with the knowledge and approval of the parties.
1,80000 or any part thereof AND WHEREAS the said Nath Bank Ltd. thereupon instituted four suits in High Court being suit Nos.
WHEREAS the Nath Bank Limited demanded from the Mills the payment of the sum of Rs.
The Mill Company was advised to settle the suits and the respondent companypany entered into an agreement with the Mill Company, the material part of the terms of which runs as follows Memorandum of Agreement made between the Calcutta Agency Limited of the one part and Basanti Cotton Mills Ltd. of the other part.
APPELLATE JURISDICTION Civil Appeal No.
Under the said agreement, the respondent companypany paid to the Mill Company Rs.
C. Setalvad, Attorney General for India G. N. Joshi, with him for the appellant.
500 and a companymission of 3 per cent.
1,80,000 and interest thereon AND WHEREAS the said Mills repudiated their liability in respect thereof as it appeared from the books of the said Mills that the said Mills did number have the use of the said sum of Rs.
The Nath Bank Ltd. instituted four suits 1011 against the Mill Company, in two of which the respondent companypany were party defendants.
The Judgment of the Court was deliv ered by KANIA C.J. This is an appeal from the judgment of the High Court at Calcutta Harries C.J. and Chatterjea J. pronounced on a reference made to it by the Income tax Tribunal under section 66 2 of the Indian Income tax Act.
1 80,000 claimed by the Nath Bank Ltd. under the hundis.
Their remuneration was fixed at a month ly allowance of Rs.
59 of 1950.
December 21.
In November, 1932, the Basanti Cotton Mills Ltd. was incorporated and the respondents were appointed their managing agents.
1683, 1720, 1735 and 1757 of 1939 for the said aggregate sum of Rs.
on all gross sales of goods manufactured by the Mills Company.
The Nath Bank Ltd. claimed payment of these hundis.
The respondents are a private limited companypany which was brought into existence to float various companypanies including companyton mills.
The said moiety shall be one half of the companymis sion so payable less such sum as the Directors of the Mills may from time to time allow to be deducted.
Appeal from a Judgment of the High Court of Judicature at Calcutta Harries C.J. and Chatterjea J. dated 9th September, 1949, in a reference under section 66 2 of the Indian Income tax Act, 1922.
The relevant facts are these.
The fixed monthly allowance was liable to be increased in the event of the capital of the companypany being increased.
The assessee companypany claimed this before the Income tax Appellate Tribunal as a deduction permitted under section 10 2 xv of the Indian Income tax Act.
4,393 as interest in the accounting year.
Reference No.
In the statement of the case submitted by the Tribunal after reciting the fact of the incorporation of the companypany and the terms of the companypromise mentioned above, the argu ments urged on behalf of the assessee companypany have been recapitulated.
The details are immaterial.
