MAMANCHAND FAKIRCHAND Vs. STATE OF U P

JUDGEMENT

(1.) THIS is a reference under Section 66(1) of the Indian Income-tax Act and the following question has been referred to us for decision :-

(2.) THE assessee firm Messrs. Mamanchand Fakirchand works as commission agent and deals in tobacco and potatoes. Besides the usual commission, the assessee used to charge a sum of 8 annas per bag from customers to meet the expenses incurred in the supply of the commodities to them. THEse charges amounted in the assessment year 1946-47 to Rs. 11,787 and in the year 1947-48 to Rs. 11,515. THE assessee showed in its account books that in 1946-47 it had spent Rs. 11,796 and in 1947-48 Rs. 11,498.

(3.) THE point raised before the Appellate Tribunal was that the amount of 8 annas per bag was a special allowance granted to the assessee who held an employment of profit to meet the expenses wholly and necessarily incurred for the purpose of its duties as commission agent.