LAKSHMI AMMAL S Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee is the proprietrix of a business called Swami and Co., Madras. THE business consisted in the export of goat and sheep skins. She employed her husband, one V. Narayanaswami Iyer, as her agent and manager first under an agreement entered into on 16-10-1948. His remuneration was fixed under that agreement at Rs. 750 per mensem or an amount calculated at the rate of five per cent, on the entire turnover whichever was higher. Subsequently on and from 1-7-1949 his remuneration was Increased. It was fixed at a minimum rate of Rs. 750 per mensem or 3/4 per cent. on the turnover if is ranged between 18 to 24 lakhs and 1 per cent. if the turnover exceeded 24 lakhs.

(2.) THE question then for the Income-tax authorities was how much of this amount could be allowed as expenditure wholly and exclusively for the purpose of such business. This question they could decide only by estimating what could be reasonable expenditure for the purpose for which the said Narayanaswami Iyer was employed. How much should be allowed as reasonable expenditure on this account is a pure question of fact. .