Dipak Kumar Sen, J. - (1.) This reference under the I.T. Act, 1961, arises from the assessment of Messrs, Vishnu Agencies (P.) Ltd., the assessee, in the assessment years 1963-64, 1964-65 and 1965-66, the relevant previous years having ended on the 31st January of the years 1963, 1964 and 1965, respectively.
(2.) During the relevant years, the assessee had engaged or employed a number of persons under different agreements in writing as follows : 1. Agreement dated the 2nd February, 1959. This agreement was entered into by and between the assessee and one Mangilal Sethia whereby the assessee engaged the latter as its sole selling agent in respect of spun R.C.C. pipes and collars manufactured by the assessee on the following terms and conditions : (a) The agency would be effective on and from the 1st February, 1959. (b) The sole selling agent would deposit a sum of Rs. 10,000 to be held by the assessee without interest during the subsistence of the agreement. (c) The sole selling agent would not during his appointment purchase or receive for sale any commodity similar to those manufactured by the assessee from any third party in his own name or account or in the name or on account of any other person or persons. (d) During the subsistence of the agreement the assessee would not appoint any other sole selling agent to sell any of its produce but this would be without prejudice to the rights of the assessee to appoint agents, distributors or sub-distributors. (e) On all sales of the products of the assessee, through any agent or distributor or sub-distributor or direct to dealers or consumers, the sole selling agent would be paid a commission of 4% on the listed price. (f) The agreement would in the first instance be for a period of three years from the 1st February, 1959, to the 31st January, 1962, unless determined earlier otherwise. (g) The sole selling agent would bear all expenses of establishment, publicity, godown rent, etc., that might have to be incurred in connection with the promotion and sale of the goods of the assessee. 2. Agreement dated the 8th December, 1959. This agreement was entered into by and between the assessee and the partnership firm, Mangilal Bhikamchand, whereby the latter was appointed as the selling agent of the assessee for "Konark Cement", for the sale of which the assessee had been appointed as organisers on, inter alia, the following terms and conditions : (a) The agency would be for the area known as Calcutta for a period of four years with effect from the 1st February, 1960. (b) The assessee would not during the continuance of the agreement appoint any other selling agent for Konark Cement but the right to appoint sub-stockists for the sale thereof in the said area would be reserved. (c) All orders secured by the selling agent would be passed on direct to the assessee and on all orders placed by them the selling agent would be entitled to a commission of Rs. 3 per ton, which would become due and payable only on the realisation of the dues of the assessee. (d) The selling agent would be responsible to the assessee for all dues in respect of all orders and if within a period of six weeks from the date of supply in terms of the orders placed by the selling agent the cost and other charges of such supply would not be realised by the assessee the amount so due and payable to the assessee would be recoverable from the selling agent.
(3.) Agreement dated the 28th September, 1962. This agreement was entered into by and between the assessee and the said partnership firm, Mangilal Bhikamchand, whereby the latter was appointed the selling agent of the assessee for sale of "Rockfort Cement" manufactured by Messrs. Dalmia Cement (Bharat) Ltd. for the area known as Greater Calcutta, for a period of 3 years with effect from the 1st October, 1962, on terms and conditions identical with those in the aforesaid agreement dated the 8th December, 1959.;