Dipak Kumar Sen, J. - (1.) This reference is in respect of wealth-tax assessments of the Imperial Chemical Industries, London, the assessee, in the assessment years 1957-58, 1958-59 and 1959-60. The relevant valuation dates are the 31st December, respectively, in each of the calendar years 1956, 1957 and 1958. The facts found and/or admitted in the proceedings are as follows :
(2.) The assessee is incorporated in the United Kingdom and carries on the business of manufacture of dyestuffs and other chemicals. Imperial Chemical Industries (India) Ltd. (hereinafter referred to as the Indian company), incorporated in India, is the Indian subsidiary of the assessee and the assessee owns the entire share capital of the Indian company. Under an agreement dated the 23rd May, 1953, effective from the 1st January, 1953, the assessee appointed the Indian company as its sole agent in specified territories, including India, in respect of dyestuffs manufactured by the assessee in the United Kingdom on, inter alia, the following terms and conditions : (a) The assessee would supply to the Indian company stocks of its products to be handled and stored by the Indian company as instructed by the assessee. (b) Such consignment stocks would be held by the Indian company as agents for the assessee and, until sold in accordance with the provisions of the agreement; would remain the property of the assessee and the Indian company would hand over to the assessee the stock remaining in its possession on determination of the agreement. (c) The assessee would pay or discharge all import duties and transport expenses for the delivery of the consignment stocks to the Indian company including expenses incurred for landing, warehousing, storing, mixing, repacking and insuring such stocks. (d) The consignments would be siored in a manner indicating that they were the property of the assessee. (e) The assessee would from time to time notify the Indian company the prices at which the products were to be sold. (f) The Indian company would render to the assessee, every month, a statement showing all transactions effected by the Indian company during the preceding month and would remit to the assessee money realised in accordance with the monthly statements, less its commission and expenses, within thirty days of the end of the calendar month to which the statement relates or within such period as may be agreed from time to time. (g) The Indian company would keep books of account relating to the transactions and would furnish statements of stock in hand and other statistics from time to time as the assessee might direct and all such records and books would be accessible to the assessee, their travelling representatives and auditors at all reasonable times on reasonable notice and the same may be audited from time to time by the assessee's representatives or auditors at the cost of the assessee. (h) For services rendered under the agreement and for accepting del credere responsibility, the Indian company would receive from the assessee commission at the rate of 11% on the net invoice value of the products sold. (i) The assessee would be entitled to sell its products directly in the agency territory. The Indian company would be credited with commission at the agreed rate on such sales. (j) The assessee would pay for or reimburse the Indian company for commission or discount paid by the Indian company to its distributors including expenses incurred for advertising the product within the territory. (k) The assessee would supply at its own expense or pay for pattern cards, circulars, samples, trade lists and other publicity materials, which would remain the property of the assessee until distribution and the balance after distribution would be returned to the assessee.
(3.) The above agreement between the assessee and the Indian company was subsisting during all the relevant assessment years and governed the transactions between the parties. At its wealth-tax assessments, the assessee contended that it did not come within the definition of a company as defined in Section 2(h) of the W.T. Act, 1957, as it stood at the relevant time. The assessee had no place of business in India. It only sent its products to the Indian company on consignment basis which were sold under the agreement.;