PREMIER CONSTRUCTION CO Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE assessees were the managing agents of a company and were remunerated by commission "at the rate of ten per cent. per annum on the annual nett profits of the company. . . provided that such commission shall not in any year amount to a less sum than Rupees ten thousand. " One of the sources of income of the company was the manufacture of sugar, which it did partly (a) from canes grown by the company on its own farms, and (b) partly from canes bought from outside. In assessing the company to income-tax its income derived from source (a) was treated as agricultural income and exempted from the tax. The assessees contended, in their assessment to income-tax, that their commission derived from income from source (a)was agricultural income within the meaning of Section 2(1) and was exempted from income-tax under Section 4(3)(viii) of the Indian Income-tax Act, 1922: Held:

(2.) NEGATIVING the contention that on a true construction of the term of the managing agency it could not be said that the managing agents received any portion of the agricultural income when they received remuneration for services rendered for managing the affairs of the company, one part of the business of which was agriculture.