1952 (12) TMI 43

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....esolutions passed at the extraordinary general meeting on 17th October, 1943, and the provisions of Section 87C of the Indian Companies Act, the Tribunal was right in directing that excess profits tax fell to be deducted before arriving at the net profit upon which a fixed percentage was allowed as managing agents' commission." On the 9th day of April, 1936, the managing agency agreement, Annexure 'C', was made between the Western Hosiery and General Mills, Limited, Delhi, hereinafter referred to as the assessee company, and Messrs. Sohan Lal and Company, hereinafter referred to as the managing agents. By clause 2 of the agreement, Annexure 'C', the remuneration of the managing agents was fixed. That provision has ....

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....and and Company Limited v. Hindustan Construction Company Limited [1944] 12 I.T.R. 104 held that excess profits tax was to be deducted before arriving at the net profits upon which commission was to be paid to the managing agents. On the application of the assessee company under Section 66(1) of the Indian Income-tax Act, 1922, the Tribunal has referred for decision to this Court the question of law cited above. From a perusal of article 83, Annexure 'A', it is plain that the definition of the expression "net profits" given in article 83 does not mean "divisible" or "distributable" profits of the company for commission is to be paid to the managing agents before deducting depreciation. In my opinion, the parties have defined t....