TaxTMI 
TaxTMI 
1982 (3) TMI 109
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....have been given at page 1 of its paper book. Agreements were entered into by the assessee with them. A copy of the agreement with Misr Import & Export Co., Cairo, has been filed before me and it was stated on behalf of the assessee that other agreements are similar. It appears from the aforesaid agreement that the agent was to develop and expand the sale of the products of the assessee within the territory for which it was appointed (Clause 3), that the principal (i.e., the assessee) was to deliver the products ordered by the agent on board of the vessel at Calcutta or any other Indian port against irrevocable letter of credit by the customers in favour of the principal or any other terms of payment agreed upon by the principal (Clause 4), ....
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....ealisation of the sale proceeds of the exported materials within one month from the realisation of the sale proceeds in a manner approved by the Exchange Control Authority. In view of the terms of the agreement I agree with the view of the ITO that the liability for payment of Rs. 23,878 was not incurred during the relevant year. The addition is, accordingly, confirmed." 3. The assessee's counsel challenges the above finding of the learned Commissioner (Appeals) and submits that clause (6) of the agreement referred to above did not determine the accrual of the commission income to the agents. That income accrued and arose to them as soon as they placed orders on the assessee-company and the assessee-company in compliance with the said or....
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....red. 4. On behalf of the revenue, the order of the learned Commissioner (Appeals) was stoutly supported and it was pointed out that an expenditure could be said to have been incurred only when the person who could claim the payment of the said expenditure had acquired the right in law to file a suit against the assessee-company to enforce his claim in a court of law. In the present case, the agents could not file a case in a court to get the commission from the assessee till all the payments were received by the assessee in India. The accrual of liability could not, therefore, have resulted till the sale proceeds had come into India. In rejoinder, the learned counsel for the assessee submitted that the test as to whether or not an expend....
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....s year and, therefore, if there was nothing in the contract to the contrary, it could be said that the liability for paying the commission had accrued and arisen as soon as the services were rendered by the agent and nothing further remained to be done by him. But clause (6) of the present agreement goes to show that irrespective of time of rendering the services, the commission will be payable to the agent only upon full realisation of the sale proceeds of the exported materials. Apparently the implication is that if by chance the sale proceeds do not come in full, the commission would not become payable to the agent even though he had rendered his services and even when he had no role to play in the realisation of the bill made out by the....
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....ssoons as well as the transferee during the whole of the years, considered the proportions of the service rendered by the Sassoons and the transferee as the managing agents of the companies as decisive of the portions of the managing agency commission earned respectively by each. The parenthood of the income received by the transferee was considered to be the real test, i.e., whoever rendered the services earned the income arising from those services. This argument was, however, negatived by their Lordships of the Supreme Court who said that one had to look not merely at the services rendered but at the fact whether as a result of the said services a right to sue in a court of law for the income resulting from such services had vested in th....