INDERCHAND HARI RAM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) These two references arise out of the assessment of the same assessee Messrs. Inderchand Hari Ram, Gorakhpur, in respect of two different assessment years, viz., 1940-41 and 1941-42. Since the question, that arose, was common to both the references, the Income-tax Appellate Tribunal, Allahabad, made one consolidated order of reference and, by it, referred the following question to this Court for opinion:

(2.) The facts relating to these references, as given in the statement of the case, are that the assessee is a firm registered under the Indian Partnership Act, having come into existence through a deed of partnership which mentioned that it was being constituted with a view to floating a private limited company to be called the Shankar Sugar Mills, Limited with a capital of 13 lacs out of which a sum of 12 lacs of rupees was to be subscribed by the partners according to their shares in the firm and to securing its Managing Agency. The partnership deed provided that

(3.) The only question to be decided in these references is whether the assessee firm, in working as Managing and Sole Agents of Messrs. Shankar Sugar Mills, Limited, was working as a servant earning salaries falling within Clause (i) of Section 6 of the Indian Income-tax Act, or earning profits and gains of business, profession or vocation mentioned in Clause (iv) of that section. We may first take up the question of the capacity in which the firm worked as Managing Agents of Messrs. Shankar Sugar Mills, Limited. In Clause (9A) of Sub-section (1) of Section 2 of the Indian Companies Act, a managing agent is defined as meaning