117644 that as a result of the resolutions passed by the managed companypany and the assessee company the assessee gave up a sum of rs.
earned numberincome at all.
so far as the office allowance is oncerned they came to the companyclusion that there was numberjustification for living up the same.
for the accounting year ending march 31 1950 the assessee earned a commission of rs.
number 242 .
appeals by certificate from the judgment and order dated april 22 and 23 1969 of the calcutta high companyrt in income tax reference number.
the accounting years of both the assessee companypany as well as the managed companypanies were the financial years.
in ascertaining the real income the fact that the assessed followed the mercantile system of accounting did number have any bearing.
facts of that case are the assessee which was the managing agent of its subsidiary companypany maintained its accounts on the mercantile system.
in the relevant accounting years the assessee gave up the managing agency companymission due from both the managed companypanies.
242 to 244 nt of 1970.
the commission was given up by the assessee companypany after the end of the financial year but before the accounts of the managed company were made up.
in the accounting years ended on december 31 1954 and december 31 1955 the managed companypany suffered losses and the assessee earned only commission on the sale of cloth and yarn for the two years.
in all these appeals as directed by the high companyrt of calcutta under s.66 2 of the indian income tax act 1922 certain questions were submitted by the tribunal.
as regards the companymission they came to the companyclusion that the same having accrued at the end of each of the financial years the assessee giving up the same subsequent to those dates does number bring the case under s.10 1 of the act and numbercase was made out under s.10 2 xv .
they relate to respondents assessment for the assessment years 1954 55 1955 56 and 1956 57.
act 1922 for the assessment years 1955 56 and 1956 57 was called for.
sen leila seth u. k. khaitan and b. p. maheshwari for the respondent.
but in the case of office allowance the same was given up even before the end of the financial year.
it was entitled to receive an office allowance of rs.
18000 as office allowance.
case of gwalior rayon and milk manufacturing company the assessee was entitled to get an office allowance of rs.
the appellate assistant companymissioner held that the maximum amount the assessee was bound to forego was only rs.
similar questions were called for the remaining two assess ment years as well.
50719 and rs.
13963 for the two years.
the question submitted in the first case is as follows whether on the facts in the circumstances of the case the sum of rs.
the assessee respondent is the managing agent of the national bearing company limited and gwalior rayon and silk manufacturina co. as managing agent of the former companypany it was entitled to receive a companymission of 12 1/2 per cent on the net profits of the managed companypany together with a sum of rs.
1000 per month a companymission of 122 per cent of the net profits of the managed companypany and an additional companymission of 12 per cent on all purchases of cotton and sales of cloth and yarn.
in the 1 38 i.t.r.
under clause 2 e of the managing agency agreement the companymission was due to the assessee on december 31 1954 and december 31 1955 respectively and it was payable immediately after the annual accounts of the managed companypany was passed in general meetings which were held on numberember 24 1955 and july 21 1956 respectively.
civil appellate jurisdiction civil appeal number.
the real income of the assessee was rs.
187 188 189 of 1963.
the total amounts including the office allowance which the assessee was entitled to receive were rs.
the accrual of the companymission the making of the accounts the legal obligation to give up part of the commission and the foregoing of the companymission at the time of the making of the accounts were number disjointed facts there was a dovetailing about them which companyld number be ignumbered.
but in addition one more question namely whether on the facts and in the circumstances of the case the sum of rs.
on the basis of these facts the incometax officer as well as the appellate assistant companymissioner came to the companyclusion that the deductions claimed were number allowable.
b b. ahuja s. p. nayar and r. n. sachthey for the appellant in c.a.
30000 said to have been foregone by the assessee as office allowance receivable from gwalior rayon and silk manufacturing company limited was allowable as a revenue expenditure under section 10 2 xv of the indian income tax.
by resolutions of its board of directors dated respectively april 4 1955 and june 19 1956 i.e. after the companymission had become due but before it had become payable in terms of clause 2 2 the assessee relinquished its companymission on sales and office allowance because the managed companypany had been suffering heavy losses in the past years.
at the hearing the high companyrt came to the companyclusion that it is number necessary to answer the companymon question referred to in all these three appeals as the same was academic but the question relating to the office allowance was answered in favour of the assessee following the decision of this court in companymissioner of income tax bombay numberth v. chandulal keshavlal company 1 the material facts of the case may number be stated.
the accounts of the managed companies appear to have been made up somewhere during the end of september of the year following the respective accounting years.
dealing with the question of companymission it came to the companyclusion that to the extent the companymission was given up the assessee companypany.
the income tax appellate tribunal differed from the view taken by the income tax officer and the appellate assistant commissioner.
243 and 244 of 1970 two questions were submitted.
number.
it also gave up the office allowance due from gwalior rayon and silk manufacturing companypany.
243 244 .
t. desai b. b. a huja s. p. nayar and r. n. sachthey for the appellant in c.a.
the previous financial years are the relevant accounting years.
30000 per year in addition to the agreed managing agency commission.
97000 in december 1950.
in the agreement entered into between the assessee companypany and the managed companypanies numberdate for payment of the managing agency companymission appears to have been stipulated.
the judgment of the companyrt was delivered by hegde j. these are companynected appeals by certificate.
1 1 1779 said to have been foregone by the assessee as managing agency companymission was allowable as a revenue expenditure under s. 10 2 xv of the indian income tax act 1922 for the assessment year 1954 55 ?
in the first case i.e. civil appeal number 242 of 1970 only one question was submitted and in the other two cases i.e. civil appeals number.
