LAKSHMINARAYAN RAM GOPAL AND SON LIMITED Vs. GOVERNMENT OF HYDERABAD

JUDGEMENT

(1.) These are two appeals from the judgment and decision of the High Court of Judicature at Hyderabad answering certain questions referred at the instance of the Appellants by the Commissioner of Excess Profits Tax, Hyderabad and adjudging the liability of the Appellants for excess profits tax in regard to the amounts received by them as remuneration from the Dewan Bahadur Ramgopal Mills Company Ltd. as its Agents.

(2.) The Mills Company was registered on the 14th February 1920 at Hyderabad in the then territories of His Exalted Highness the Nizam. The Appellants were registered as a private limited company at Bombay on the 1st March 1920. On the 20th April 1920 an Agency agreement was entered into between the Mills company and the Appellants appointing the Appellants its Agents for a period of 30 years on certain terms and conditions therein recorded. The Appellants throughout worked only as the Agents of the Mills Company and for the Fasli year 1351 and 1352 they received their remuneration under the terms of the agency Agreement. A notice was issued under Section 13 of the Hyderabad Excess Profits Tax Regulation by the Excess Profits Tax Officer calling upon the Appellants to pay the amount of tax appertaining to these chargeable accounting periods. The Appellants submitted their accounts and contended that the numeration received by them from the Mills Company was not taxable on the ground that it was not income, profits or gains from business and was outside the pale of the Excess Profits Tax Regulation.

(3.) The questions (1) and (4) which were referred by the Commissioner to the High Court at Hyderabad have not been seriously pressed before us. Whether the Appellants are a partnership firm or a registered company the principle of exclusion of the income from the category of business income by reason of its depending wholly or mainly on the personal qualifications of the assessee would not apply because the income could not be said to be income from profession and neither a partnership firm nor a registered company as such could be said to be possessed of any personal qualifications in the matter of the acquisition of that income.