R.K.Agrawal, J. - (1.) The Tribunal, Allahabad, has referred the following two questions of law under Section 256(1) of the IT Act, 1961, hereinafter referred to as the Act, for opinion to this Court: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in its opinion that the firms M/s Techno Sales Corporation and M/s Kumar Wire & Conductors were not sole selling agents of the company and, therefore, the provisions of Section 294(2) were not attracted ? 2. Whether, on the facts and circumstances of the case, the Tribunal was legally correct in holding that the provisions of Section 314(1)(b) of the Companies Act, 1956, were not applicable ?"
(2.) Briefly stated the facts giving rise to the present reference are as follows: The assessment year involved is 1973-74. The respondent-assessee is a private limited company, hereinafter referred to as the company. Its previous year for the asst. yr. 1973-74 commenced on 1st July, 1971, and ended on 30th June, 1972. It paid selling agency commission to its selling agents as follows : 1. M/s Techno Sales Corporation Rs. 1,02,361 2. M/s Kumar Wires & Conductors Rs. 16,992 The company has been manufacturing galvanised iron wire, mild steel wire on barbed wire from the previous year corresponding to asst. yr. 1968-69:' On 9th Aug., 1968, it entered into a selling agency agreement with a firm styled as M/s Techno Sales Corporation, Swamp Nagar, Kanpur, whereby the said firm got the selling agency right for sale of mild steel wires, galvanised wires and other wire products manufactured by the company for the State of Uttar Pradesh. The said firm was to canvass and secure orders for the products manufactured by the company to the best of its ability and experience and for rendering these services, the firm was to be paid a commission of 1 per cent on all sales effected by the company of the goods manufactured by them either to market parties or to Government Departments. This agreement was to remain in force for a period of five years from 9th Aug., 1968, and during this period the firm was not to canvass for or act as selling agent for goods of the same kind for any other manufacturer. During the accounting period under consideration, i.e., 1st July, 1971 to 30th June, 1972, the constitution of the selling agency firm was as follows : 1. Shri Santosh Kumar s/o Shri Kishan Sarraf 15% 2. Smt. Harmukhi Devi w/o Shri Kishan Sarraf 15%
(3.) Shri Sudershan Kumar s/o Shri R.K. Agarwal 15%;