Venkataramiah, J. - (1.) These two appeals by Special Leave are filed against a common judgment dated November 18, 1971 delivered by the High Court of Andhra Pradesh in Case Referred Nos. 50 and 52 of 1970.
(2.) Sri Bormidala Kotiratnam (hereinafter referred to as 'the statutory agent') is a dealer in tobacco at Guntur in the State of Andhra Pradesh. During the previous year relevant to the assessment year 1962-63, the statutory agent purchased tobacco in India and exported it to Japan, where it was sold through M/s. Toshoku Ltd. (the assessee involved in Civil Appeal No. 762 of 1973) a Japanese Company and admittedly non-resident. Under the terms of the agreement between the statutory agent and the assessee referred to above, the latter was appointed the exclusive sales agent in Japan for selling tobacco exported by the former. The assessee was entitled to a commission of 3 % of the invoice amount. The sale price received on the sale of tobacco in Japan was remitted wholly to the statutory agent who debited his commission account with the amount of commission payable to the Japanese company and credited the same in the account of the Japanese company in his books on December 31, 1961. The amount was remitted to the Japanese company on February 1, 1962 on which date an appropriate debit entry was made in the account of the Japanese company with the statutory agent.
(3.) The statutory agent had similarly sold some tobacco during the same accounting period through another nonresident business house by name 'M/s. Societe Pour Le Commerce International Des Tobacs' (the assessee involved in Civil Appeal No. 783 of 1973) carrying on business in France. The terms of agreement were the same as in the case of the Japanese company referred to above, the only difference being the geographical area in which each of them had to render service as a selling agent. In this case also the statutory agent made similar entries in his books regarding the commission payable to the assessee and ultimately made a debit entry in the account of the assessee in his books when the amount was transmitted to the assessee.;