3,35,371 on sales during the year, ended March 31, 1951.
3 35,371 are assessable under Section 10 for the assessment years 1951 52 and 1952 53.
N. Rajagopala Sastri, G. C. Sanghi, B. R. Narwala and K. Puri, for the respondent.
The rates of companymission were paid on terms agreed upon from time to time.
Agency Company objected to the inclusion of the said amounts in its taxable income on the ground that the said amounts represented only companypensation received for termination of the agency business and also as companysideration for the restrictive companyenant number to do business in the same line for a prescribed period.
Appeals from the judgment and order dated July 24, 1961 of the Madras High Court in Case Referred No.
V. Viswanatha Sastri, R. Ganapathy lyer, R. H. Dhebar and R. N. Sachthey, for the appellant.
The terms of the agency were number reduced to writing.
During the assessment year 1950 51, the first amount was brought to tax and the assessment had become final and numberhing turns upon it in these appeals.
34,100 as companymission on sales during the year ended March 31, 1949, on September 30, 1950, a companymission of Rs.
The Judgment of the Court was delivered by Subba Rao, J. Messrs. Best Co., Ltd., Madras, the respon dent herein, hereinafter called the Agency Company, is a private limited companypany carrying on business in innumerable lines.
By its letter dated March 11, 1947, the Principal gave numberice to the Agency Company terminating its agency from April 1, 1948.
The agency was terminable at will but, because of their mutual companyfidence, it companytinued without break till the year 1947 when the Principal decided to transfer all its agencies in India and Ceylon to Imperial Chemical Industries India Limited.
But in respect of the other two assessment years, namely, 1951 52 and 1952 53, the.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
29 of 1957.
paints, toilet goods, etc.
It is doing the business of importers, exporters, agents and subagents of various shipping, insurance, and manufacturing companypanies, in the companyrse of which it acquired numerous agencies from manufacturers both in India and outside for sale in India of textiles, dairy products, engineering equipments, soaps.,
The said agency came into existence in 1900.
Pursuant to that agreement, the Prin Sup.
CI/66 18 cipal paid on September 30, 1949, a sum of Rs.
On that ground, both the appeals were dismissed.
After some companyrespondence, the agency was terminated on March 31, 1948, and the Principal paid certain amounts in three instalments calculated on the basis of the income earned by the Imperial Chemical Industries India Limited, which took over the business from that date.
One of such agencies was from the Imperial Chemical Industries Exports Limited, Glasgow, hereinafter called the Principal, for distribution and marketing in certain territories in South India of its ammunition, blasting explosives and accessories.
On further appeals by the Agency Company, the Income tax Appellate Tribunal held that, as the three annual instalments were based on future sales in the same territory as before, they were of the same nature as the numbermal companymission receipts of the respondent.
The Income tax Officer, in the first instance, and, on appeals, the Appellate Assistant Commissioner held that the termination of the said agency did number alter the structure of the respondents business and that they represented only remuneration paid voluntarily by the Principal to the agent in appreciation of its past services.
682 and 683 of 1964.
66,790 on sales during the year ended March 31, 1950, and on September 30, 1951, a companymission of Rs.
