COMMISSIONER OF INCOME TAX Vs. KOTHARI CARPETS

JUDGEMENT

(1.) THE Tribunal, Allahabad, has referred the following question of law under s. 256(1) of the IT Act, 1961 (hereinafter referred to as the Act) for opinion to this Court : "Whether, on the facts and circumstances of the case, the Tribunal was legally correct in holding that the expression 'maintenance of agency' meant an act of continuing the relationship of principal and agent in terms of s. 35B(1)(b)(iv) of the IT Act, 1961 -

(2.) THE reference relates to asst. yr. 1981 -82. Briefly stated the facts giving rise to the present reference are as follows : The respondent -assessee is a manufacturer and exporter of hand -knotted carpets. With a view to maintain and increase its exports in Europe, it had entered into an agency agreement with M/s Ingeborg Unadcath of Hamburg. It will be necessary to quote the relevant provisions of this agreement as under :

(3.) WE have heard Shri R.K. Upadhyay for the Revenue and Shri Suyesh Agarwal holding brief of Shri R.R. Agarwal on behalf of the respondent -assessee.