1966 (10) TMI 18

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....acted as the sales agent in Europe of the Gudur Mica Produce Co., Gudur (referred to as "G. M. P. C."), which mines mica and exports it abroad. Under section 43 of the Income-tax Act, the G. M. P. C. was treated as a statutory agent of the non-resident firm. The G. M. P. C. appointed the assessee, Westam, as the selling agent on the basis of commission payable in accordance with the terms of the agreement (annexure "A" to the statement of the case). Under clause 5(a) of the agreement, the G. M. P. C. will pay to Westam commission in respect of all orders from the continent of Europe placed with G. M. P. C. via Westam and as well placed direct by customers with the G. M. P. C., and a certain percentage of commission has been stipulated there....

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....ney was received in India by that firm as soon as its statutory agent credited the amount to its account in their books. Their Lordships of the Supreme Court held that, as soon as the assessee credited the amounts to the company in the assessee's account, the relationship between the parties ceased to be that of debtor and creditor, and that when the moneys were credited in the accounts, they should be treated as moneys deposited by the Japanese company with the assessee. It was also held that the moneys were thus received by the Japanese company in India on the date when they were credited, and the assessee could be assessed as their statutory agent in respect of such moneys. Mr. Rama Rao, however, tries to distinguish that case on the gro....

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.... gross sale proceeds of the mica were received from Japan by the assessee in Gudur. A certain percentage of the sale proceeds was payable as commission to the non-resident on whose direction the amount payable as commission was credited to his account in the books of the assessee. The commission was not payable until the sale proceeds were received by the assessee and was payable out of the sale proceeds. The non-resident should be regarded as having received his commission in India for the first time when the amount of commission was separated from the sale proceeds and credited to his account according to the terms of the agreement between the parties." On the same page, the learned judge has further observed : "The position is the same....