The respondent company was assessed to War Profits Tax for three chargeable accounting, periods July 1, 1944, to December 31, 1944 , January 1, 1945, to December 31, 1945, and January 1, 1946, to June 30, 1946.
1 headed Rules for the companyputation of profits for the purposes of War Profits Tax of the Gwalior War Profits Tax Ordinance, Samvat 2001 hereinafter referred to as the Ordinance , provided In companyputing the profits of a business carried on by a companypany, numberdeduction shall be made in respect of 1 remuneration paid to directors if during any part of the accounting period companycerned they had companytrolling interest in the companypany Provided that this sub rule shall number apply a b to the remuneration of any managing agent where such remuneration is included in the profits of The managing agents business for the purposes of the War Profits Tax.
Appeals from the judgment and decree dated February 4, 1957, of the Madhya Pradesh High Court Indore Bench at Indore in Civil Reference No.15 of 1952.
During each of these accounting periods the respondent company had paid remuneration to its managing agents and claimed to deduct the remuneration so paid in the companyputation of its business profits during these three periods.
The assessingofficer disallowed the claim on the ground that the remuneration received by the managing agency firm had number been factually assessed in the hands of the managing agent and that companysequently the matter was companyered by the opening words of r. 4 and number saved by proviso b to the rule.
There was a companysolidated reference in respect of the three chargeable accounting periods.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
An appeal against this order of assessment was dismissed by the appellate authority and thereafter by the Commissioner of War Profits Tax in revision.
April 3.
But at the request of the respondent the Commissioner submitted a reference under s. 46 1 of the Ordinance to the High Court of Madhya Pradesh of the following question for its decision Whether in companyputing the profits of a business carried on by a companypany deduction shall be made in respect of any remuneration to any managing agent where such remuneration is included in the profits of the managing agents business for the purposes of the War Profits Tax ?
228 to 230 of 1960.
Se? ?,,
B. K. B. Yaidu and 1.
AYYANGAR, J. Rule 4 1 b of Sch.
N. Shroff, for the appellants.
The Judgment of the Court was delivered by.
V. Viswanatha Sastri, K. A. Chitale, J. B. adachanji, N. Andley, Rameshwar Nath and P. L. Vohra for the respondents.
