Managing agency commission accrues where the services are actually performed, so Bombay accrual defeated partial tax exemption.

Managing agency commission accrues where the services earning it are actually performed, not where the amount is computed or credited. On the facts, only minor freight booking and collection work was done at Cochin, while the substantial and responsible management of the shipping business was conducted from Bombay; the record did not show any real managing agency activity at Cochin beyond a nominal office arrangement. The commission for the third managed company, tied to net profits, also accrued at Bombay. The claim for apportionment and partial tax exemption therefore failed.

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Issues: Whether the managing agency commission accrued or arose at Bombay or in the Indian States so as to be exempt in part from tax.

Analysis: The governing test is the place where the services yielding the commission are actually performed, not the basis on which the remuneration is computed. On the findings, only a limited part of the activity at Cochin consisted of booking and collecting freight, while the substantial and responsible management of the shipping business was carried on from Bombay. The evidence also did not establish any real performance of managing agency services at Cochin beyond a make-believe office arrangement. For the third managed company, whose remuneration was linked to net profits, the commission likewise accrued at Bombay. The authorities relied on the principle that commission ordinarily accrues where the managing agency work is done.

Conclusion: The commission accrued or arose in Bombay and not in Cochin or the Indian States, so the claim for apportionment and exemption failed.

Ratio Decidendi: Managing agency commission accrues at the place where the managing agent actually performs the services that earn the commission, and not merely where the commission is calculated or credited.

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