Commission deducted from sale proceeds counts as payment under the Income-tax Act when retained by the buyer as collecting agent.

Commission deducted from sale proceeds and retained by the buyer, who acted as collecting agent for the commission creditor, was treated as payment for the purpose of section 18(3B) of the Income-tax Act. The High Court also held that the Income-tax Officer's inference of liability from the contract form and accounts was a finding of fact, and such findings were not open to interference in writ jurisdiction under article 226 unless shown to be necessarily erroneous. On that basis, the statutory payment requirement was satisfied and the challenge to the assessment order failed.

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Issues: Whether commission payable under section 18(3B) of the Income-tax Act was paid in the manner required by law when the amount was retained from sale proceeds and credited through the buyer, and whether the Income-tax Officer's factual findings could be disturbed in writ jurisdiction.

Analysis: The liability for commission was inferred from the contract form and the petitioner's accounts, and those inferences were treated as findings of fact. Such findings were not shown to be necessarily erroneous and could not be reopened in a petition under article 226. On the meaning of payment, even assuming that section 18(3B) required actual payment, the amount retained by the buyer from the price and left in its hands for transmission to the commission creditor amounted to payment through an agent. The indirect mode of remittance was treated as equivalent to direct payment to the commission recipient.

Conclusion: The statutory requirement of payment was satisfied, and the challenge to the Income-tax Officer's order failed.

Final Conclusion: The petition was dismissed because the commission was validly treated as paid through the collecting agent and the factual findings supporting the order were not open to interference.

Ratio Decidendi: Where commission is deducted from sale proceeds and retained by a buyer acting as collecting agent for the commission creditor, the amount is treated as payment for the purpose of section 18(3B) of the Income-tax Act, and factual findings supporting that conclusion are not ordinarily reopened in writ jurisdiction.

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