SHOORJI VALLABHDAS AND CO BOMBAY Vs. COMMISSIONER OF INCOME TAX EXCESS PROFITS TAX BOMBAY
LAWS(SC)-1960-4-11
SUPREME COURT OF INDIA (FROM: BOMBAY)
Decided on April 19,1960

SHOORJI VALLABHDAS AND COMPANY,BOMBAY Appellant
VERSUS
COMMISSIONER OF INCOME-TAX EXCESS PROFITS TAX, BOMBAY Respondents





Cited Judgements :-

LAKSHMIPAT SINGHANIA VS. COMMISSIONER OF INCOME TAX [LAWS(ALL)-1968-12-10] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. BIRLA BROTHERS PRIVATE LTD [LAWS(CAL)-1974-12-15] [REFERRED TO]


JUDGEMENT

S. K. Das, J. - (1.)This is an appeal with special leave from the judgment and orders dated March 31, 1952 and March 2, 1953, of the High Court of Bombay in an Income-tax reference No. 48 of 1951 made by the Income-tax Appellate Tribunal, Bombay, under S. 66 (1) of the Indian Income Tax Act, 1922 and S. 21 of the Excess Profits Tax act, 1940.
(2.)We may shortly state the relevant facts first. The assessee Messrs. Shoorji Vallabhdas and Company, Bombay, appellant herein, is a firm registered under the Indian Income-tax Act. It held the managing agency of three companies, namely - (1) the Malabar Steamship Company Ltd., (2) the New Dholera Steamships, Ltd., and (3) the New Dholera Shipping and Trading Company, Ltd. for the periods material in this case. The appellant as also the aforesaid three managed companies were resident in the taxable territories within the meaning of the Indian Income-tax Act. The business of the Malabar Steamship Company, Ltd., and of the New Dholera Steamships, Ltd. was to carry cargo in cargo boats which touched ports in British India, Cochin State, Travancore State, and Saurashtra, as they were then known. The appellant became the managing agent of the Malabar Steamship Company, Ltd. with effect from April 1, 1943, and the firm consisted of Shoorji Vallabhdas and his two sons. Formerly, Shoorji Vallabhdas alone was the managing agent of the Malabar Steamship Company, Ltd. and a managing agency agreement dated September, 16, 1938, was executed between the managing agent and the managed company, and that agreement as varied by two subsequent deeds dated June 26, 1942 and December 7, 1943, constituted the contract of managing agency between the appellant and the managed company. Under the managing agency contract the remuneration payable to the appellant after September 1, 1943 was expressed in the following terms:
"That the remuneration of the Managing Agents as and from 1st September one thousand nine hundred and forty-three shall be ten per cent. (10%) on the freight charged to the shippers instead of annas fourteen per ton as mentioned in Cl. (1) of the said first supplemental agreement dated the 26th day of June, 1942."

(3.)The managing agency agreement dated June 8, 1946, between the appellant and the second managed company, New Dholera Steamships, Ltd. provided inter alia as follows:
"That the Managing Agents shall as and by way of remuneration for their services in relation to the shipping business of the Company receive a commission of ten per cent. (10%) of the gross freight charged to the shippers and/or passage money charged to the passengers. Such remuneration shall be payable to the Managing Agents at the place where the same is earned by the Company unless otherwise requested by the Managing Agents. The remuneration of the Managing Agents in relation to the business of the Company other than the shipping business shall be (10%) ten per cent. on the gross profits that may be earned in such business."
It may be stated here, however, that no question arose as to the remuneration of the Managing agent in relation to business other than shipping business, because no business other than shipping business was carried on by the managed company during the relevant period.
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