https://www.taxtmi.com/caselaws?id=7988 Commercial labels in a distribution agreement are not conclusive; the true legal substance controls whether an agency exists for tax purposes. Because the distributor had to pay the invoice price, resell on its own account and at its own risk, could not bind the importers or pledge their credit, and dealt independently with customers and sub-distributors, the arrangement was treated as a buyer-reseller relationship rather than principal and agent. The return of unsold goods did not alter that character. On that basis, compensation received under the arrangement was not taxable as agency income. en-us Thu, 15 Jan 1970 00:00:00 +0530 Tue, 19 Jul 2016 17:31:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7988 Commercial labels in a distribution agreement are not conclusive; the true legal substance controls whether an agency exists for tax purposes. Because the distributor had to pay the invoice price, resell on its own account and at its own risk, could not bind the importers or pledge their credit, and dealt independently with customers and sub-distributors, the arrangement was treated as a buyer-reseller relationship rather than principal and agent. The return of unsold goods did not alter that character. On that basis, compensation received under the arrangement was not taxable as agency income. Case-Laws Income Tax Thu, 15 Jan 1970 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7988